Weighted Average Wage for Overtime Computation

Teamwork's payroll output allocates overtime with a method consistent with FLSA overtime requirements. https://www.dol.gov/agencies/whd/fact-sheets/23-flsa-overtime-pay

The overtime wage can be a source of confusion to both employers and employees. The rate used for overtime may align with the role / rate being worked when overtime occurs. To adhere to federal requirements, overtime must be paid using a weighted average, or allocated proportionately across all roles and wage rates worked in a workweek.

There are two paths to finding a weighted overtime average, which are identical in their conclusion. Examples are shown below:

Teamwork uses Method Two shown above, which allocates overtime proportionately to the hours and wage rates worked by an employee, regardless of the role being worked when overtime occurs.

Note: Teamwork does NOT factor Gratuities and Services fees in the calculation of regular pay for overtime calculations at this time. Merchant's should ascertain with legal and accounting professionals if gratuities and services fees should be included in overtime calculations, and verify that the payroll processor provides the computation, or that the necessary manual steps are taken.