Aimee is a salaried nonexempt employee who earns an annual salary of $52,500 for a 38-hour workweek, paid biweekly. The employer pays overtime for any hours worked in excess of 38 per week. During a pay period, she worked 86 hours. She has requested that she take
Compensatory time in lieu of paid overtime. How much compensatory time should she receive, assuming that her ﬁrm approves the
Compensatory time?
A) 10 hours
B) 12.5 hours
C) 15 hours
D) 20 hours

Question

Quizplus · Accepted Answer

For the first 38 hours, Aimee will be paid her regular salary. 
For the remaining 48 hours (86-38), she will receive overtime pay at 1.5 times her hourly rate. 
To calculate her hourly rate, we divide her annual salary by the number of work hours in a year:

$52,500 / (52 weeks * 38 hours/week) = $30.38/hour

Her overtime rate would be $45.57/hour (1.5 * $30.38). 
For 48 hours of overtime, she would earn:
$45.57/hour * 48 hours = $2,186.56

If Aimee takes compensatory time off instead of receiving paid overtime, she should receive 1.5 hours of compensatory time for every hour of overtime worked.

48 hours * 1.5 = 72 hours of compensatory time

However, since most employers cap the amount of compensatory time an employee can accumulate, the maximum amount of compensatory time off that Aimee can take would likely be 15 hours (assuming her employer allows her to accrue up to two weeks, or 80 hours, of compensatory time).

Aimee Is a Salaried Nonexempt Employee Who Earns an Annual