Applies to versions: 1.6, 1.8, 1.9, 1.10, 1.11, 2.0, 2.1, 2.2, 2.3, 2.4, 2.5
Understanding Overtime Policies and Workweek Groups
In TimeIPS, an Overtime Policy is a set of rules that allow the payroll engine to calculate overtime. If you have non-exempt employees, this is the most important payroll configuration item in TimeIPS. Workweek groups connect employees to Overtime Policies, and set the legal workweek for weekly overtime rules.
What is an Overtime Policy?
In TimeIPS, an Overtime Policy is a set of rules that allow the payroll engine to calculate overtime.
These rules include such things as:
- The number of hours worked in a day before overtime and/or doubletime starts
- The number of hours worked in a week before overtime and/or doubletime starts
- Special rules such as 7th day overtime
What is a workweek?
A workweek is a 168 hour period consisting of seven 24-hour days. In many areas, labor laws dictate that after a certain number of hours in a workweek, additional work must be paid as overtime. The seven 24-hour days within the workweek are called workdays, and in some areas, labor laws dictate that after a certain number of hours in a workday, additional work must be paid as overtime. Most businesses will have workweeks and workdays aligned with calendar days, but this is not required. When employees follow workweeks that start in the middle of the calendar day, most reports and exports will follow the workweeks and workdays, rather than calendar days.
What is a Workweek Group?
Workweek Groups provide:
- A way to connect employees to Overtime Policies
- A way to set the starting day and time of workweeks for employees
- A way to change the effective Overtime Policy over time
What is the purpose of having an “Overtime Policy?” Isn't overtime just time over 40 hours in a week?
In some locations, with some kinds of employees, working a single shift, with a steady schedule, overtime might be that simple. But, in most cases it's not.
Overtime policies allow TimeIPS to accurately calculate overtime for employees:
- Working night shifts and/or across week boundaries
- Who get a raise in the middle of the week (i.e. on the 1st of the year, or on their anniversary)
- Working changing schedules and/and schedules with shift differentials
- Working on jobs or special times with pay differentials or intentional overtime
- Who use benefit time that reduces the hours before reaching overtime for the week
- Who receive bonus pay, commission pay and/or piecework pay
- In locations where labor law calls for overtime after a certain number of hours in one day
- In locations where labor law calls for overtime after working a number of consecutive days
- With company/union policies that dictate pay differentials and/or overtime on holidays
- When labor laws, business policies and/or union contracts change over time
- And many other special situations
How does TimeIPS use Overtime Policies?
Different groups of employees, doing different kinds of work, in different areas, in different years, may all need different overtime rules. TimeIPS allows you to create Overtime Policies for all such situations. Then, TimeIPS allows you to use Workweek Groups to connect Overtime Policies to groups of employees. The connections can change and are tracked by date. Each time an employee works, TimeIPS looks at the Workweek Group the employee belongs to, at that very moment, finds the Overtime Policy in use at that time, and calculates the resulting overtime.
How will I know what overtime rules apply?
It is essential that you know the labor laws that apply to your work force and configure an Overtime Policy to match. This will allow TimeIPS to calculate overtime accurately and will help you comply with labor laws. If you have employees in multiple states, or doing multiple types of work, you may have different labor laws and rules that cover them. TimeIPS will allow you to create an overtime policy for each such group. If you're not sure what laws apply to you:
- Carefully review US Federal Labor Law, 29 CFR Subpart B 778. If you have complexity (i.e. frequently changing schedules, shift/job/special-day differentials, piecework/bonus/commission pay, consecutive workday overtime, etc.), we suggest careful review of pay policies with an attorney that specializes in labor law.
- You may also benefit from state websites such as: State Labor Offices
- Read the Fair Labor Standards Act to find out which employees are eligible to declare overtime and which ones are exempt from such regulations. The Fair Labor Standards Act also specifies how much you should pay for overtime (usually one-and-a-half times the normal hourly rate), what happens with overtime hours worked during holidays or weekends and who has the right to approve the overtime.