Reference tool for payroll scenarios.

For documented determinations that fit your onboarding cycle (pre-hire, first payment, mid-year changes), use the Compliance Engines.

View Compliance Engines →

TOOL #2: WAGE & HOUR COMPLIANCE

The "Regular Rate" Trap

Most payroll errors happen when bonuses or commissions are paid in overtime weeks. See exactly how much you might be underpaying by using the standard 1.5x Base Rate vs the FLSA Regular Rate.

Scenario Inputs

Base Hourly Rate ($)

Weekly Hours Worked

Standard: 40Overtime: 10 hrs

Non-Discretionary Earnings

Commissions ($)

Shift Differential ($)

Production/Performance Bonus ($)

Total Includable Bonus$500.00

Naive Calculation

Assumed OT Rate$30.00

Total Weekly Pay$1600.00

FLSA Compliant

True Regular Rate$30.00

Total Weekly Pay$1650.00

Compliance Alert: Underpayment Detected

By using the base rate for OT instead of the FLSA Adjusted Regular Rate, you are underpaying this employee by $50.00 this week.

Annualized Risk (52 weeks)

$$2,600.00

How it works

The FLSA requires that overtime be paid at 1.5x the "Regular Rate", not just the hourly base rate. The Regular Rate is total compensation divided by total hours.

Included (Must Gross Up)

• Non-discretionary Bonuses
• Shift Differentials
• Commissions
• Production/Performance Pay
• Retroactive Pay Increases
• Attendance Bonuses

Excluded (No Impact)

• Discretionary Bonuses (Holiday)
• Gifts / Spot Awards
• Paid Time Off (PTO/Sick)
• Expense Reimbursements
• Stock Options (Qualified)
• Retirement Contributions

* This list is for educational purposes only. Consult an employment attorney for specific classifications.

FLSA Overtime Compliance Record