The time and a half rate for $7.25 an hour is $10.87 per hour.
"Time and a half" is the standard term for the overtime pay rate, which calculates to 1.5 times an employee's regular hourly wage. This enhanced rate is typically paid for hours worked beyond 40 in a workweek for non-exempt employees, as stipulated by federal labor laws in the United States.
Calculating the Time and a Half Rate
To determine the time and a half rate, you simply multiply the regular hourly wage by 1.5.
Here's the straightforward calculation for an hourly rate of $7.25:
| Component | Value |
|---|---|
| Regular Hourly Wage | $7.25 |
| Overtime Multiplier | 1.5 |
| Time and a Half Rate | $10.87 |
(Calculation: $7.25 × 1.5 = $10.87)
Understanding Overtime for Tipped Employees
While the core calculation for the time and a half rate remains consistent, the direct cash wage received by tipped employees for overtime hours can differ due to the application of a "tip credit." Employers are permitted to use a portion of an employee's earned tips to fulfill part of their minimum wage obligation.
For a tipped employee whose direct cash wage is $7.25 per hour, the effective cash wage for overtime hours is calculated by subtracting the applicable tip credit from the gross overtime rate. For example, if a tip credit of $5.12 is taken, the direct cash wage for overtime hours would be:
- Calculated Overtime Rate: $10.87
- Less Tip Credit: $5.12
- Direct Cash Wage Rate for Overtime Hours: $5.75
This demonstrates that while the overtime rate for computational purposes is $10.87, the actual amount paid directly to a tipped employee for their overtime hours could be lower, with tips contributing to meet the total required overtime compensation.
Key Aspects of Overtime Pay
- Federal Mandate: The Fair Labor Standards Act (FLSA) generally requires employers to compensate non-exempt employees at a rate of at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.
- State-Specific Regulations: It's important to note that some states may have their own overtime laws, which could include higher overtime rates or daily overtime requirements. Employees and employers should always consult relevant state labor laws in addition to federal guidelines.
- Employee Classification Matters: Eligibility for overtime pay hinges on an employee's classification. Most hourly workers are considered non-exempt and are therefore eligible for overtime compensation.
