What Is Chinese Overtime?

What Is Chinese Overtime?

Chinese overtime, which is also called a variable workweek or half-time method of overtime calculation, involves the fluctuating work week.

Employers use this method in order to save money. While using this method is legal, some employers calculate the pay incorrectly. If your employer uses this method and has failed to pay you enough for your overtime hours, you might want to consult with the employment law attorneys at Swartz Swidler.

How the fluctuating work week works

Overtime pay is traditionally paid at a rate of 1.5 times of the worker’s standard hourly pay for each hour that he or she works over 40 in a week. When employers use the Chinese overtime calculation, they use salaries that are paid for all of the hours worked during the week. For the hours that an employee works over 40 hours, he or she will receive half-time pay as calculated with the Chinese overtime formula. The employer figures out what the employee’s normal base rate pay by dividing the fixed salary by the number of hours worked. The fixed salary amount is supposed to be the payment of straight time for all of the hours that were worked. The additional half-time amount is only paid for the added hours worked beyond 40.

What is Chinese overtime: Understanding the Chinese overtime formula

In order to understand the Chinese overtime calculation that is used in the fluctuating workweek method, it is easiest to use an example. An employee who has a weekly salary of $900 and who works 60 hours during the week has a standard base pay of $15 per hour, which is calculated by dividing $900 by 60. Since the worker worked 20 more hours during the week than 40, the half-time premium is one-half of $15, which is $7.5. In addition to the $900 salary, the worker will also receive $7.5 times 20 hours or $150 in overtime pay.

Requirements for legal Chinese overtime

Employers that use the fluctuating workweek method to calculate overtime must meet the following guidelines:

  • The employees’ hours must change from week to week;
  • The employees’ base salaries must not change according to the hours that they work;
  • The base salaries must be at least the minimum wage for all weeks; and
  • Both the employers and employees must understand that the employers will pay the base salary amounts no matter the number of hours that are worked.

Possible violations and illegal use of Chinese overtime

There are several ways that employers may use the fluctuating workweek method incorrectly, leading to violations of the state and federal labor laws. Some employers use this method for employees whose hours do not fluctuate on a weekly basis. Others violate the minimum wage law by providing base salaries that are too low. Others violate the law by not paying the standard salary to their workers when they work fewer than 40 hours in a week. Shift differentials and other additional compensation may not be given under the fluctuating workweek method because the employees would not receive fixed salaries.

If your employer has violated the law with your overtime pay calculation, the employment law attorneys at Swartz Swidler may be able to help you. It is possible that your employer will be forced to pay you what you are owed along with additional penalties.