What Is Double Pay & How Is It Calculated?

With many Americans working overtime and living paycheck to paycheck, the extra work employees put into their jobs should be compensated properly. That is why many companies offer premium pay, including double pay, to compensate employees for working additional or demanding hours.

But what does double pay mean, and how is it calculated? Read more below to learn about double pay, the rules surrounding it, how it can fit into a compensation strategy, and the different scenarios that can apply from state to state.

What is double time pay?

Double time pay is a pay rate that gives an employee twice their regular rate of pay for eligible hours worked. Employers may offer double time for overtime, holidays, weekends, or other situations based on company policy or applicable labor laws.

Double pay can incentivize employees to work during high-stress situations, such as the holidays or when the workplace is short-staffed, while providing them with significantly higher pay during these times.

Use CompXL® to help manage and plan employee pay more effectively.

How does double pay work?

As the name implies, double pay works by doubling an employee's regular hourly rate after they've worked over 50 hours that they're supposed to.

It's also most commonly rewarded to employees who pick up shift during federal holidays and/or work when it's short- staffed. Eligible employees need to track 10 hours or more work in a day to receive the extra pay.

Similar to regular salary, double time pay is also subject to income and Medicare taxes along with Social Security deductions.

Double pay vs. overtime pay

Although overtime and double time are both extra pay, they use different pay rates. Overtime often pays 1.5 times an employee's regular rate, while double time pays twice the regular rate.

The FLSA does not require employers to pay double time after a certain number of hours, such as 50 hours. Instead, double time may depend on company policy, an employment agreement, a union agreement, or state law.

For covered, nonexempt employees, the FLSA generally requires overtime pay after more than 40 hours of work in a workweek. The overtime rate is at least 1.5 times the employee's regular rate. Some states have additional overtime rules, so requirements can vary by location.

Rules and regulations with double pay

Much like everything else, there are rules and regulations that apply to double pay that both companies and employees need to understand beforehand.

Although the FLSA does not require double time, California requires certain employers to pay double time in specific situations. Under California's general overtime rules, employees receive double their regular rate for hours worked beyond 12 hours in a workday or for hours worked beyond 8 hours on their seventh consecutive day of work.

For the seventh consecutive workday, employees generally receive 1.5 times their regular rate for the first 8 hours and double their regular rate for any hours worked beyond 8.

Employers in other states generally do not have to provide double time under federal law. However, they can offer double time based on company policy, an employment agreement, a collective bargaining agreement, or applicable state law.

How is double pay calculated?

Double time pay is generally calculated by multiplying an employee's regular hourly rate by two. For example, if an employee earns $20 per hour, their double time rate would be $40 per hour.

Step 1: Find the regular hourly rate

Start with the employee's regular hourly rate. For example, an employee who earns $20 per hour has a regular rate of $20.

Step 2: Multiply the hourly rate by two

Multiply the regular hourly rate by 2 to find the double time rate.

$20 x 2 = $40

Step 3: Multiply the double time rate by eligible hours

If the employee works 5 hours at the double time rate, the calculation would be:

$40 x 5 = $200

Step 4: Add the double time pay to other earnings

Add the $200 in double time pay to the employee's regular and overtime earnings to find the total pay for the period.

Several factors, such as eligible hours, the employee's regular rate, and applicable company or state rules, can affect the final calculation. CompXL® can help organizations manage employee pay and streamline the compensation process.

Double pay examples by state

As mentioned above, double time compensation has different rules that vary by state. The following examples show how overtime and double time rules apply in Texas, California, Colorado, Nevada, and Oregon.

• Scenario 1: Texas

  There are no distinct laws in Texas that require employers to provide double time after an employee works overtime. That said, employers are still required to pay overtime to covered, nonexempt employees who work more than 40 hours in a workweek.

  The lack of a state overtime rule means that Texas generally follows the Fair Labor Standards Act (FLSA). Under the FLSA, eligible employees receive at least 1.5 times their regular hourly rate for overtime hours. Double time is not generally required.

• Scenario 2: California

  As mentioned above, California has specific rules regarding double time pay. In general, employees receive overtime at 1.5 times their regular hourly rate after working more than 8 hours in a workday. Employees receive double time for hours worked beyond 12 hours in a workday.

  Employees who work on the seventh consecutive day of a workweek also receive 1.5 times their regular rate for the first 8 hours and double time for any hours worked beyond 8 hours.

• Scenario 3: Colorado

  Colorado follows its own overtime rules, which can apply when employees work more than 40 hours in a workweek, more than 12 hours in a workday, or more than 12 consecutive hours. Eligible overtime hours are generally paid at 1.5 times the employee's regular hourly rate.

  Colorado does not generally require employers to provide double time for overtime hours. However, employers can offer double time through company policies, employment agreements, or union contracts.

• Scenario 4: Nevada

  Nevada has additional overtime rules beyond the federal FLSA requirements. In certain cases, employees who earn less than 1.5 times the applicable minimum wage can receive overtime after working more than 8 hours in a 24-hour period. Employees can also receive overtime after working more than 40 hours in a workweek.

  Nevada does not generally require employers to provide double time for overtime hours.

• Scenario 5: Oregon

  Similar to many states, Oregon generally follows the FLSA overtime standard and requires eligible employees to receive 1.5 times their regular hourly rate for hours worked over 40 in a workweek.

  However, Oregon has additional overtime rules for certain industries, including manufacturing. Double time is not generally required under Oregon law, but employers can provide it through company policies or employment agreements.

FAQs

Here are some common questions about double time pay:

What is double time for $17 an hour?

Double time for an employee earning $17 an hour is $34 per hour. The calculation is: $17 x 2 = $34

Is it double pay after 12 hours?

Not always. Double pay after 12 hours depends on the applicable state law, company policy, or employment agreement. For example, some state laws require double time for hours worked beyond 12 hours in a workday, but the FLSA does not generally require double time after 12 hours.