Straight-time Pay
The term “straight-time pay” refers to an employee’s regular rate of pay for regular work hours, typically based on their base hourly wage or salary, without overtime or premium pay. It is the standard wage for the usual number of hours worked in a given day, week, or month. Non-exempt workers who are subject to wage and hour laws typically qualify for straight-time pay.
For instance, if a worker puts in 40 hours per week and earns $15 an hour, their straight-time pay for that week would be $600 (40 hours divided by $15). No bonuses, incentives, or overtime pay are included in this calculation.
Straight-time pay is important because it provides a baseline for calculating any additional compensation, such as shift differentials or overtime, and ensures that employees are compensated fairly for their regular working hours. It assists employers in establishing pay practices that are equitable and is a fundamental concept in labor laws.
It is important to note that straight-time pay is not the same as overtime pay, which is additional compensation given to employees for working more hours than the daily or weekly limit. To encourage employers to limit excessive working hours and to compensate employees for their extra effort and time, overtime pay is typically calculated at a premium rate, typically 1.5 times the regular rate of pay.