Chinese overtime is calculated at half of the employee's hourly wage for that week. Chinese overtime is also referred to as the "half-time method" of calculating overtime. A more professional and politically correct term is the fluctuating work week, or FWW, method.
There are certain conditions that an employee must meet to be eligible for Chinese overtime. The employee must have a work week with fluctuating hours, be paid a fixed salary that does not change with hours worked and the hourly rate used to calculate the overtime wage must not be less than the current minimum wage for that state. The steps to calculating Chinese overtime are fairly simple.
- Calculate the hourly wage for the week
- Calculate the overtime wage
Divide the weekly salary by the hours worked for the week. For example, if the weekly salary is $500 and the employee worked 50 hours, the hourly wage for that week is $10.
Divide the amount from step one in half to determine the overtime rate. From that example, the overtime is $5. Multiply that dollar amount by the number of hours the employee worked that exceeded 40. Using the example from step one, the employee worked 10 hours over, which results in $50 of overtime pay.