TECHNICAL GLOSSARY

What Is Double Time Pay?

Double-time compensation is defined as double an employee's normal hourly pay rate. This type of compensation is referred to as "premium pay" and is typically paid when employees have exhausted normal limits on working hours or in some cases have been required to work on certain holidays or have worked for an extended period of time.
Federal law under the Fair Labor Standards Act (FLSA) provides that employees who are classified as nonexempt must be compensated at the rate of time and one-half (1.5 times) for working in excess of 40 hours during a single work week. Double time pay is NOT mandated by federal law, whether double time compensation will be provided will be dependent upon the particular applicable state law or the employers internal pay policies.

When Does Double Time Pay Apply?

Double-time pay is usually provided only once a certain limit has been met. There are a few occasions when an employer may provide double-time pay, including the following:

• For hours worked over a set number of hours in one day
• Extended holiday and/or rest days
• Exceeding state law's higher daily/weekly limits on hours worked

Some states have enforced daily overtime limits. As an example, California has established that non-exempt employees who work over 12 hours within a day or over 8 hours on the 7th consecutive day of work for a week will be entitled to double-time pay.

Is Holiday Pay Considered Double Time?

Employers are not required by federal law to provide premium pay for holiday work. Under FLSA, holidays are just like any other workday, meaning if you work on a holiday, it does not mean that you automatically get overtime or double time for that work unless your hours exceed 40 hours in the week or state law requires it otherwise. However, there are many employers who will choose to provide employees who work on holidays with premium/ double-time pay as part of their compensation policy.

Creating a Holiday Pay Policy

If an employer wants to provide extras (like holiday pay or a double-time rate) they must have good documentation in terms of their policy. The following items should be included for a good written policy:

• Identifying which holidays the employer will recognize
• Identifying any work requirement (to get the holiday pay)
• Any premium pay rate
• Any eligibility rules

Having a well-defined policy will help ensure that employees are treated consistently and according to the law regarding wages and hours.

How to Calculate Double Time Pay

To calculate double-time wages, you must first establish the employee's regular rate of pay which will be used to calculate overtime rates and premiums.
If an employee works 50 hours in a work week earning $20 per hour, their earnings break down as follows:

• $800 paid for the first 40 hours ($20/hour x 40 hours)
• $300 paid for the next 10 hours ($30/hour x 10 hours)
• The employee's total earnings would be $1,100.

Double-time pay only applies if there is a state law or agency policy requiring it.
If an employee has two separate positions with the same employer:

• 20 hours at $20/hour = $400
• 30 hours at $30/hour = $900
• The employee's total straight-time earnings would be $1,300.

The regular rate would be $1,300 / 50 hours = $26/hour.
The employee's overtime pay would be $390 (10 hours x $39/hour).
The employee's total earnings would be $1,690.