Opinion ID: 549039
Heading Depth: 2
Heading Rank: 2

Heading: The Regular Rate of Compensation for Overtime

Text: 28 The general overtime pay standard of the FLSA requires that overtime must be paid at a rate not less than 1 1/2 times the regular rate of employee compensation. 34 As noted above, earnings under the FLSA may be expressed on a salary basis in an employment contract, but without exception overtime compensation must be calculated based upon the hourly rate derived from such salary. 35 The regular hourly rate of pay of an employee is determined by dividing the total remuneration for employment in any [work period] 36 by the total number of hours actually worked by him in that [work period] for which such compensation was paid. 37 The following formula is used to calculate the regular rate: 29 The salary for the two week work period is calculated by dividing the annual salary from the personnel ordinance by a factor of controversy in the present case centers around the proper figure to use for total hours worked. 30 Originally, due to the county's practice of not including mealtimes in hours worked for calculating accrued overtime, a discrepancy existed between the number of hours compensated per work period (121) and the hours worked for calculating accrued overtime (106). In this case we decided that the county's mealtime exclusion policy is contrary to FLSA regulations, so the discrepancy will not exist in the future. Under the present work arrangement compensated hours and hours worked for overtime purposes are now the same for each work period. In any event, as noted by the district court, FLSA regulations require that, for salaried employees, the number of hours worked for use in the divisor of the regular rate formula is in fact 121, the number of hours actually spent on the job. 38 IV. Credit or Set-Off for Excess Overtime Premiums 31 Prior to the effective date of the FLSA's application to state and local governments, Glynn County paid overtime premiums to its employees. However, after the effective date of the 1985 amendments, the county continued its pre-FLSA practice of compensating overtime at a rate 1 1/2 times the 2928 rate. 39 In some work periods the 2928 rate was smaller than the FLSA regular rate described above, so the computed overtime premium paid during such periods was also insufficient. The county admits liability for the compensation shortfall during these periods. But, during some work periods, the 2928 rate was greater than the regular rate, so the county seeks credit for excessive overtime premiums paid during these periods. On the issue of entitlement to credit for excess overtime compensation the district court concluded: if at trial the defendant can establish that the premiums it paid for holiday work, call back work, and consecutive shifts was equal to or greater than one and one half times the regular rate ... the defendant will be entitled to credit for such overtime premiums paid. (emphasis added). According to the county, the district court's decision effectively denies it credit for overtime premiums paid during work periods when the 2928 rate fell below the regular rate. 32 The FLSA mandates that extra compensation paid by an employer be credited toward overtime compensation due. 40 While we question whether the district court's language has the meaning urged by the county, to clear up any confusion we hold that the county should be allowed to set-off all previously paid overtime premiums, not just those equal to or greater than 1 1/2 times the regular rate, against overtime compensation found to be due and owing during the damages phase of the trial.