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When an employee is paid two hourly rates in a workweek, overtime is calculated using a weighted average regular rate.
The weighted average is determined by dividing total weekly compensation by total hours worked, including overtime hours.
Overtime is then paid at one-half the weighted average rate, and double time at the full weighted average rate.
For example, an employee earns $20 per hour for 35 hours ($700) and $25 per hour for 15 hours ($375), totaling $1,075 for 50 hours worked. The regular rate is $1,075 divided by 50 hours ($21.50). Overtime (10 hours) is paid at 0.5 times $21.50 ($10.75), totaling $107.50. Total weekly pay equals $1,182.50.
If one rate is mandated by law (such as a prevailing wage), the regular rate for overtime is the higher of the weighted average or the rate in effect when the work is performed.
If overtime is worked on a prevailing wage job, it must be paid at the applicable prevailing wage rate. If overtime is worked on nonpublic work, the weighted average applies.
Mandated wage rates cannot be reduced by applying a weighted average when prevailing wage work is performed during the overtime hours.
Read about Calculating Overtime in the HR Library.