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What is double pay?

Double-time pay is a pay rate that is twice the employee's normal rate of pay. Employees might be eligible for double-time pay when they work overtime hours, or holiday pay for employees working on federal holidays.

patriotsoftware.com - What is Double-Time Pay? | Definition, Rules, & Beyond

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Payroll is a notoriously intricate subject, and is not as simple as cutting someone a check that was calculated at a single rate of pay. As an employer, it is likely that you will encounter the issue of double-time pay. But, what is double-time pay? Read on for the scoop.

What is double-time pay?

Double-time pay is a pay rate that is twice the employee’s normal rate of pay. Employees might be eligible for double-time pay when they work overtime hours, or holiday pay for employees working on federal holidays. Union contracts may include double-time wages, but the Fair Labor Standards Act (FLSA) does not require you to pay double-time wages to nonexempt employees. Curious about what the FLSA does and doesn’t require? Our free guide can help. Download our FLSA cheat sheet to learn more about FLSA rules (and common misconceptions). Get My Free Guide!

How does double-time work?

You might give double-time pay to employees for:

work done on a holiday

irregular or less desirable shifts

any overtime hours worked after a certain amount of time

Double-time pay example

Let’s say you decide to pay your employees double-time pay for any hours they work on Black Friday. Jake works 32 hours that workweek, eight of which fall on Black Friday. Step 1: Determine how many hours are subject to double-time wages. For Jake, eight hours count toward double-time wages. Step 2: Double the employee’s regular hourly rate. If Jake normally earns $11 per hour, his double-time rate would be $22 ($11 x 2). Step 3: Multiply the double-time hours by the double-time rate. Jake’s total pay for Black Friday would be $176 ($22 x 8 hours). Step 4: You would add the total double-time wages to the employee’s regular wages for the pay period. You would then withhold taxes and other deductions as normal.

State double-time pay laws

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Some states (California and Washington) have state labor laws that require you to pay double-time wages in certain situations. California requires employers to give employees double their regular pay for any hours worked beyond: 12 hours on a workday Eight hours on the seventh consecutive day of work in a workweek

Washington law may require double-time pay for “certain public works projects.”

How to set up a double-time policy

You can create a policy to provide double-time compensation to employees. If you do not employ workers in states that require double-time pay, you can still create your own double-time pay policy. Remember, you don’t have to do this, but it may be a benefit your employees appreciate. If your employees are part of a union, make sure you understand your double-time obligations. First, make sure your overtime policy is in compliance with FLSA rules for regular overtime pay. You might also want to consider industry standards for double-time if they exist.

Then, decide which situations you are willing to offer double-time pay to employees. Will your employees earn double-time wages for work done on holidays? What about irregular or undesired shifts? Or, will you create a policy similar to California’s that allows employees to earn double-time wages after a certain number of hours worked in a day?

Once you determine your double-time policy, write it down. A good place to put it is in your employee handbook. Whatever double-time policy you choose, make sure you clearly explain it to employees. Don’t let the hassle of payroll calculations slow down your real progress. Try Patriot’s online time and attendance software for small business, and experience less stress and more focus on what matters in your business. This article has been updated from its original publication date of July 18, 2012.

patriotsoftware.com - What is Double-Time Pay? | Definition, Rules, & Beyond

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