An employee works 45 hours in a week at $25 per hour. Calculate the gross pay including overtime at time-and-a-half.
Correct Answer
C) $1,187.50
Regular pay: 40 hours × $25 = $1,000. Overtime: 5 hours × $37.50 (time-and-a-half) = $187.50. Total gross pay = $1,000 + $187.50 = $1,187.50.
Why This Is the Correct Answer
Option C correctly calculates overtime pay according to federal labor standards. Regular pay is 40 hours × $25 = $1,000. Overtime applies to hours over 40, so 5 hours × $37.50 (time-and-a-half rate of $25 × 1.5) = $187.50. Total gross pay is $1,000 + $187.50 = $1,187.50. This follows the Fair Labor Standards Act requirement for overtime compensation.
Why the Other Options Are Wrong
Option A: $1,000.00
This amount only accounts for regular pay of 40 hours × $25 = $1,000, completely ignoring the 5 hours of overtime work. Federal law requires overtime compensation at time-and-a-half for hours worked over 40 in a workweek.
Option B: $1,250.00
This calculation appears to pay all 45 hours at the overtime rate of $37.50 ($1,687.50 ÷ 45 = $37.50), which is incorrect. Only hours worked over 40 should receive the time-and-a-half premium rate.
Option D: $1,125.00
This amount suggests paying all 45 hours at the regular rate of $25 ($1,125 ÷ 45 = $25), which violates federal overtime requirements. Hours worked beyond 40 must be compensated at time-and-a-half the regular rate.
Memory Technique
Remember '40-PLUS' rule: First 40 hours at regular rate, PLUS overtime hours at 1.5× rate. Think: 40 regular + 5 overtime = separate calculations, then add together.
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