## Chinese Overtime
## A Chinese Overtime ExampleForgetting about any minimum wage laws and special overtime laws of some states like California, let's say that a non-overtime exempt employee's regular rate of pay is $10.00 per hour. After working 40 hours in a workweek, they would have earned $400.00. Using traditional overtime calculations, work after that 40 hours would be paid out at $15.00 per hour, or 1.5 times the employee's regular rate of pay. Therefore, if the employee works 50 hours, 10 hours would be paid out at $15.00 per hour, so the employee would earn a gross pay of $550 in the workweek. ((40 * $10.00) + (10 * $15.00)) = $550.00.
In a
In a Using method 1, the way the law reads, the employee would earn $8.00 per hour for all 50 hours, and would be paid a 0.5x premium for the hours beyond 40. That works out to ($8.00 * 50) + ($4.00 * 10) = $440.00. Using method 2, a more traditional overtime calculation is done. You still get to the employee's regular rate of pay by doing the $400.00 / 50 = $8.00 per hour calculation. Then pay the first 40 hours at that rate, and the next 10 at the normal 1.5x multiplier rate. That calculation would look like ($8.00 * 40) + ($8.00 * 1.5 * 10) = $440.00. Both calculations are mathmatically equivalent. The first is more confusing. Spectrum TimeClock uses the second method. ## Chinese Overtime is Under FireSome states like Pennsylvania have ruled against Chinese Overtime, stating that it violates minimum wage laws.
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