Double time pay refers to the doubling of a worker's hourly rate, generally for a particular reason having to do with timing or other issue of concern to employers. Given that it is so costly, employers will want to balance potential benefits against that cost before putting it on offer. Employees may find the wage attractive, but may need to surrender time with their families or the celebration of holidays to get it.
Contrary to some conventional beliefs, there aren't federal mandates that an employer pay double time wages to employees at any particular time. Employees logging excess of 40 hours in a week must receive 150 percent of their hourly rate, but only for the excess time. Double time pay isn't contemplated in that regulation, and isn't applied to special days such as Sundays or holidays. There may be special rules in place, however, due to an company policy or worker agreement, that specifies double time pay.
While it's not federally required, and while it will cost employers more, double time is the kind of incentive that can spur action when employers seek to fill necessary holiday or other shifts that are traditionally difficult to fill. For instance, a double time offering for Sundays, or Thanksgiving weekend, might be enough to have an employee delay the turkey dinner.
Double time not demanded by prior agreement like a labor contract can be implemented as a regular feature for inconvenient shifts or other extraordinary circumstances. Another option, though, is to implement it on an as-needed basis. This allows more control over expense. In addition, it signals the perquisite as an occasional benefit instead of an expected one.
Double Time Calculation
In calculating double time wage, omit hours not worked during the time period you wish covered. Similar to overtime, where the first 40-hour block is paid at standard per hour rates, count only hours logged during double time designated shifts, multiplying doubling the employers hourly rate. The extra funds become part of the employee pay, and may alter the employee's paycheck deductions, so be sure to consult withholding tables for workers so paid.