We would like to have a nonexempt employee work two jobs with a different hourly rate of pay. Which rate of pay is used to calculate the employee's overtime pay?

Under federal law, an employer may take one of two approaches when handling this situation. The first method involves paying overtime bas​ed on the “regular rate,” also referred to as the “weighted average.”

To determine the regular rate, the total amount earned by the employee in both straight-time pay rates is divided by the total number of hours worked in that specific workweek.

For example, suppose your employee works a 38-hour week in his or her primary job and is paid $12 per hour. In that same week, the employee works 12 hours in his or her secondary position and is paid $9 per hour. The total number of hours worked is 50; therefore, your employee has worked 10 hours of overtime pay at time and one half their regular rate.

To determine the regular rate, the calculation is as follows:

• 38 hours x $12 = $456
• 12 hours x $9 = $108
• $456 + $108 = $564
• $564/50 hours worked = $11.28 per hour

$11.28 is the regular rate.

To determine this employee’s overtime half-rate, follow these steps:

• $11.28 x .5 = $5.64
• $5.64 x 10 overtime hours = $56.40

This employee’s total wages for the week will be $564 plus $56.40, which equals $620.40.

When calculating overtime using the second method, the employer and employee must reach an agreement in advance of the hours worked. They may agree to pay the employee one and one-half times the hourly non-overtime rate for all overtime hours worked based on the position worked when the overtime hours occurred.

Using the previous example, if the employee worked in the position that paid $9 per hour during all overtime hours, the overtime is paid using the $9 per hour straight rate and an overtime rate of $13.50 ($9 x .5 = $4.50; $9 + $4.50 = $13.50). The employee then earns $456 for the time worked in his or her primary position, $18 for the two straight hours worked in the secondary position (2 hours x $9), and $135 for the 10 hours of overtime (10 hours x $13.50) for a grand total of $609.

The Department of Labor has also issued an opinion letter that provides guidance to employers on how to calculate overtime when a tipped employee works two jobs with two different rates of pay.