For California employers Regular Rate of Pay isn’t a new topic, but it still seems to be a challenge remembering when to apply it and how to calculate it, so let’s have a refresher…
Regular Rate of Pay differs from an employee’s base hourly rate, as it accounts for all payments the employee may receive over the course of the specified workweek. This would include the employee’s hourly earnings, earned commissions, production bonuses, and applicable piece work earnings. You may exclude gifts, discretionary bonuses, reimbursements, and non-working hours paid (such as Vacation or Paid Sick Leave).
Regular Rate of Pay is applicable for the following hours:
– Paid Sick Leave
– PTO, encompassing Paid Sick Leave
– CA Supplemental Paid Sick Leave
– Exclusion Pay
Calculating Regular Rate of Pay:
Add all appropriate payments the employee received over the course of the given workweek, then divide the total compensation by the total number of hours the individual worked during the given workweek.
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