If one of your non-exempt workers bills at two or more skill rates in the same workweek AND crosses 40 hours, the weekly overtime premium is calculated on the weighted-average regular rate — the worker's actual average rate of pay across the week, weighted by hours at each rate.
The straight time on each contract stays at that contract's regular rate. A separate Worker OT Premium line on the invoice carries the half-time premium delta — blended_rate × 0.5 × overtime_hours — on top of the straight-time totals. The math sounds fiddly but is mechanical once the inputs are right.
The mistake is applying time-and-a-half to the higher of the worker's two rates. That over-bills the client and, in DOL parlance, under-pays the worker the actual blended-rate overtime they're owed.
What the rule says
"Where an employee in a single workweek works at two or more different types of work for which different straight-time rates have been established, his regular rate for that week is the weighted average of such rates."
Read carefully: weighted average of such rates. Not the higher of the two, not the lower of the two, not whichever the employer prefers. The weighted average — Σ(hours × rate) ÷ Σ(hours).
The FLSA requires overtime at one and one-half times the regular rate for hours worked in excess of 40 in any workweek, for any non-exempt employee covered by the Act. For multi-rate workers, "the regular rate" is the blended rate computed under 29 CFR 778.115. The 40-hour threshold applies normally; only the regular rate is the weighted average.
The Department of Labor's Wage and Hour Division enforces the blended-rate rule through Chapter 32 of its Field Operations Handbook (the agency's internal enforcement manual). The canonical example in § 32d05a — used below as the worked example — has been the agency reference for decades. Investigators reviewing employer records check this calculation specifically when multi-rate workers appear on the books.
The U.S. Supreme Court held that the regular rate "must reflect the actual rate of pay" — employers cannot define an artificial "regular rate" by contract or convention if the worker is in fact paid at multiple rates. This is the foundational case that animates 29 CFR 778.115. The weighted-average requirement exists precisely because the alternative — picking whichever rate the employer prefers — would not reflect the worker's actual rate of pay.
The DOL FOH Ch 32 canonical worked example
Maria works for a staffing agency as both a welder ($20/h) and an electrician ($25/h). In one workweek, she logs 30 hours of welding and 20 hours of electrical work — 50 hours total, 10 of which are overtime under the federal 40-hour rule.
| Contract | Rate | Hours | Straight time |
|---|---|---|---|
| Welder | $20.00/h | 30.00 | $600.00 |
| Electrician | $25.00/h | 20.00 | $500.00 |
The blended regular rate is (30 × $20 + 20 × $25) ÷ 50 = $1,100 ÷ 50 = $22.00/h. The overtime premium is $22.00 × 0.5 × 10 hours = $110. Final compensation: $1,100 straight time + $110 OT premium = $1,210.
On the invoice, the welder and electrician contract lines stay at their respective regular rates (the worker is paid straight time for every hour worked at each rate). A separate Worker OT Premium line carries the $110 — that's the half-time premium added on top of the straight-time totals.
The common operator mistake
The most frequent error in multi-rate weeks is computing overtime at the higher of the two rates, not the blended rate. Same Maria, same hours, but the wrong calculation:
| Item | Calculation | Amount |
|---|---|---|
| Welder straight time | 30 × $20 | $600.00 |
| Electrician straight time (40h total cap) | 10 × $25 | $250.00 |
| Overtime at electrician rate | 10 × $25 × 1.5 | $375.00 |
The drift looks small per worker per week, but compounds across a roster and across pay periods. More importantly, the wrong-way number isn't just over-billed to the client — it's the wrong total in DOL's reading, because the worker's actual regular rate that week was $22.00/h, not $25/h. A wage-and-hour investigator would flag this as a misclassification of the FLSA premium under § 7(a)(1).
Common mistakes
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Applying time-and-a-half to the higher of the two rates.
The most common error. As shown above, this produces a number that's wrong both ways — over-billed to the client AND incorrect under 29 CFR 778.115. The rule is the weighted average, not the maximum.
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Applying time-and-a-half to the lower of the two rates.
The "save money" version of the wrong way. Equally wrong, and worse for the worker. The DOL has no patience for this approach in audits — it's an obvious under-payment of the FLSA-required premium.
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Treating the two contracts as separate FLSA workers.
"30 hours at one job, 20 hours at another, neither hits 40 alone, so no overtime." Wrong — the FLSA workweek is per-employee, not per-contract. The staffing agency is the single employer, and the worker's total weekly hours at the employer determine when overtime triggers.
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Forgetting the rule applies across different end-clients.
Even when Worker A's two contracts are at two different end-clients (Client X morning, Client Y afternoon), the agency is still the single FLSA employer. Blended-rate overtime applies to the combined hours. The clients don't need to know about each other — the agency aggregates the hours for the FLSA calculation.
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Trying to span two states with a multi-rate worker in the same week.
TimeCardCruncher rejects this case at submission. When state-specific rules (CA daily OT, AK greater-of, etc.) interact with FLSA blended-rate calculations across state lines, the layering becomes ambiguous and the legally-correct answer depends on facts the engine can't infer from your CSV. Split the work into separate workweeks, or set each contract's effective state explicitly on its dates.
What you get with TimeCardCruncher
You submit each contract with its own bill rate and a short skill identifier. When the same worker has two or more such contracts in a workweek and crosses 40 hours, we compute the blended regular rate per the FLSA formula, apply the half-time premium to the overtime hours, and add a separate Worker OT Premium line to the invoice that carries the premium delta — distinct from the per-contract straight-time lines so an auditor or your own internal review can trace the calculation. Single-rate weeks (the 95%+ default in staffing) ride through unchanged.