Sometimes employers are lucky enough to have an employee who is so hardworking that they don’t just want to work their one assigned job, but look for other jobs with the employer that they can do as well. When the employer is pleased with the work of that employee and the employee is capable of performing both jobs, it seems to be an ideal solution. Why not allow an off-duty police officer to plow snow in the winter and cut grass in the summer?
Hiring a current full time employee into a second (presumably part time) position will generally increase the cost of that position by 50% though, because it will likely increase that employee’s total hours worked in a week to over 40. A non-exempt employee is entitled to overtime at a rate of time and one half for hours worked in excess of 40 hours in a work week, even if that total number of hours is the result of working two separate jobs.
Now, some employers might find that to be acceptable still. An existing employee seeking additional work is a known quantity to the employer. After all, who can be a more trustworthy person plowing the streets than an off-duty police officer? There might be an added benefit of having his public safety perspective on the roads when the weather is bad. When an employee works in two separate jobs for an employer, at two different straight time rates of pay, the question becomes how to calculate the overtime rate of pay.
The regulations to the Fair Labor Standards Act, the federal statute which requires overtime pay, set forth two alternative methods of determining the overtime rate of pay when an employee works at two or more jobs for the same employer which have different rates of pay. The first is the blended or weighted rate method, defined in the Department of Regulations as follows:
29 C.F.R. 778.115 - Employees working at two or more rates.
Where an employee in a single workweek works at two or more different types of work for which different non-overtime rates of pay (of not less than the applicable minimum wage) have been established, his regular rate for that week is the weighted average of such rates. That is, his total earnings (except statutory exclusions) are computed to include his compensation during the workweek from all such rates, and are then divided by the total number of hours worked at all jobs.
Example of how to use the weighted average method:
An employee works 40 regular and 4.5 overtime hours at $10 per hour for clerical work at the office. During the same workweek, she also works eight hours at $8 per hour answering the phone at her house, resulting in 52.5 total hours worked at both jobs during the workweek.
If you are using the weighted average method, you would take her earnings from the clerical job (44.5 hours at $10/hour, or $445.00) plus her earnings from answering the phone at home (8 hours at $8/hour, or $64.00), to get a total of $509.00. You then divide the total earnings by the total hours ($509.00 / 52.5) to arrive at the weighted average regular rate of $9.70 per hour. Now, remember that the total earnings of $509.00 represent the straight-time pay she has earned for the 52.5 hours, i.e., she has already been paid straight time for those hours, and so she only needs half-time for the 12.5 overtime hours to bring her up to the required time and a half. Half-time for the weighted regular rate is $4.85/hour, so multiply that times the 12.5 overtime hours and add it to the straight-time pay to get the total pay for the workweek. That would be $4.85 times 12.5, or $60.63, and that added to $509.00 equals $569.63, the total pay including overtime. A mistake sometimes made is to compute the weighted average correctly, but then apply it erroneously, such as by taking the weighted average, multiplying it by 1.5, and then multiplying that times the number of overtime hours worked and adding that to the straight-time pay. Such a calculation ($509.00 plus 12.5 hours at $14.55 per hour) would result in a figure of $690.88, which would actually result in a large overpayment. The first thing to remember is that when you do a weighted average, it is as if you are pretending that she really worked "x" number of hours at the weighted average rate. The second main thing to keep in mind is that the weighted average times the number of hours worked equals the total straight-time earnings for the workweek, and an employee only needs to be paid the straight time once. Any time you use an overtime calculation method that depends upon a total straight time figure, the overtime hours will be paid at "half time", instead of time and a half.
The other method of calculating overtime when an employee works two or more jobs at different rates of pay is to simply pay the time and one half overtime rate at the pay rate for the job that the employee performs which exceeds the 40 hours in a work week. For instance, if your police officer works a 36 hour week in that position (three 12 hour shifts for example) and then works ten hours for the Public Works Department, the work for Public Works likely puts him over the 40 hour work week triggering overtime payment. Under the Department of Labor’s alternative method of overtime calculation, you could pay him time and one half for hours worked over 40 in a week based on the rate of pay for the Public Works job. The only requirement for this option is that the employer and the employee must agree to this method of calculating overtime before the work is performed. This is best documented in writing.
Public employers have a second consideration in our scenario because different public sector jobs require payment into different public sector pension funds. In our scenario, the police officer who plows snow and cuts grass, may require his employer to contribute not only into his police pension, but to establish contributions into a separate pension fund for his non-police work. This will depend on the number of non-police hours worked to determine separate pension eligibility. Of course, depending on the separate positions, the conclusion varies.
An employee who wants to work more than one job may seem like a gem to his or her employer. Be mindful of not only overtime pay issues, but the somewhat tricky proposition of calculating the right overtime rate when an employee works two or more jobs at different rates.
