In some jobs, employees are paid two different wages based on what type of work they are doing. For example, an employee for a snow removal company might make $20 an hour when performing snow removal activities. While performing any other duties, this employee is paid $10 an hour. If they work 50 hours in one week, at which wage is their overtime calculated?
The fair and legal wage to pay overtime in a case like the one described above is to find the weighted average wage for that week and pay the employee time and a half on that wage.
How to calculate the weighted average wage:
Snow Time Wage $20/hr @ 35 hours
Shop Time Wage $10/hr @ 15 hours
35 x $20 / hour + 15 x $10/hour = $850
$850 / 50 = $17 / hour => this is their average wage
So, their regular time compensation is $17 * 40 = $680
and their overtime compensation is 1.5 * $17 * 15 = $382.50
Their total earnings for the week are $680 + $382.50 = $1,062.50