Applies to versions: 1.6, 1.8, 1.9, 1.10, 1.11

Overtime Policies

Overtime Policies define how overtime is calculated for workweeks.

Using the left pane Main Menu, click on: Administration » Payrolls and Reports » Overtime Policies.

Overtime Policies define how overtime is calculated for workweeks. These policies stand alone and do not, by themselves, determine how overtime is calculated for any one employee. Instead, you must link Overtime Policies to Workweek Groups.

Add a New Overtime Policy

 

• Type the new overtime policy name into the Name field and click on the Add Overtime Policy button.
  
  
  

   

• The new overtime policy will be created and added to the list of Existing Overtime Policies.

 

Edit Existing Overtime Policies

 

• Click on the + sign in front of the overtime policy you just created to expand the record.
  
  
  
  NOTE: The above settings are the default settings for all new overtime policies. Based on your company's needs, you can modify these settings using the following options.

 




 

• Modify the Rate Multiplier, Workweek Limit, and Daily Limit for Overtime and Doubletime as needed. New for Version 1.6 Premium Time has been added as a Pay Type

 

 

• Choose your option for 168 Hour Workweeks. If this option is "Yes", workweeks will be considered to be recurring periods of 168 hours, without exception. If this option is "No" workweeks may vary in length to accommodate DST changes (if DST is in use/effect).

 

 

• Most company's overtime is based on hours worked in one week and/or in one day. If your company calculates overtime based on time worked in two-to-four weeks, set the following options as applicable:

   

  • Choose whether you want to Prorate truncated averaging periods. If this option is "Yes" in the event that workweeks of more than one calendar week overlap due to changes in Workweek Group settings the first overlapping workweek will have its overtime (and doubletime) calculated based on prorated overtime rules. If "No" is selected overtime in overlapping workweeks of more than one calendar week in length will be calculated according to U.S. Department of Labor (US), Field Operations Handbook 32j13(c) as of Jun 30, 2000.

   

   

  • Choose whether to Combine overlapping long workweeks. If workweeks of more than one calendar week in length overlap but are the same length, some companies treat the overlapping workweeks as one workweek for overtime and doubletime calculation purposes. To enable this behavior, select "Yes." Most organizations will prefer to select "No" and disable this behavior.

   

 

 

• If applicable, choose your option for California Seventh Day Overtime and Doubletime. Treat work done in the "first eight hours worked on the seventh day of work in any one workweeks" as overtime and "any work in excess of eight hours on any seventh day of a workweek as doubletime" in accordance with California Labor Code (Section 510 (a)) by selecting Yes 1.

  Choose Yes 2 if you are a California company that chooses to follow the interpretation of Section 510(a) as follows: "the [Labor Commissioner] has indicated in its enforcement policy that it intends to follow the historical rule and require the premium only if an employee works all seven days in the workweek." As explained by the author earlier in the footnote, "[t]he seventh-day premium has historically applied only if an employee worked on each of the days in the workweek, not simply on the seventh day. If A.B. 60 were construed otherwise, it would result in the illogical conclusion that overtime premiums would be owed for a single day of work if that work occurred on the last day of the workweek."

  If Section 510(a) of California's Labor Code (as of Jan. 1, 2007) does not apply to employees following this Overtime Policy, select No.

 

 

• Choose whether All work on 7th day of Workweek is Overtime. Some companies treat all time worked on the 7th day of a workweek as overtime regardless if the employee has worked all preceding days. If this is the desired behavior for employees following this Overtime Policy choose "Yes" otherwise, choose "No."

 

 

• Choose whether there is Overtime for work done on holidays. Select "Yes" if, in accordance with Canada Labour Code, Part III, 202 (1) as of Jan. 1, 2007, employees following this Overtime Policy should have all hours worked on the same calendar day as a holiday (as entered in the Holidays Administration) treated as overtime.

 

 

• Choose whether Holidays reduce overtime and doubletime requirements. Select "Yes" if, in accordance with Canadian Labour Code, Part III, Division I, 169(3) as of Jan. 1 2007, employees following this Overtime Policy should have "the hours of work of the employee in that week ... be reduced by the standard hours of work for each general holiday in that week." If holidays do not effect the hours an employee must work in workweeks using this Overtime Policy, choose "No."

 

 

• Available in TimeIPS version 1.5.6 or higher, choose whether an employee following this policy Qualifies for benefits that count towards overtime.

 

 

• Choose whether to Respect workweek boundaries when promoting time for holidays. Holidays are generally set up to cover a 24 hour period that begins on midnight. However, when employees have workweeks that start at non-midnight times and "Overtime for work done on holidays" above is checked, the worked time that is promoted to overtime can be determined differently. By selecting "Yes," the system will determine which workweek day the majority of the holiday lies within and promote all worked time on that workweek day to overtime. If "No" is selected, only worked time that falls exactly within the observed range of the holiday (usually midnight to midnight) will be promoted to overtime.
  (example: Employee A is in a work week that starts at 1 pm. He works the 4th of July which is a holiday. Since the Majority of the 4th of July falls on his work day of July 3rd 1pm to July 4th 1pm all time worked in this period will be paid as overtime.)

   

• Once you have completed your adjustments, click on the Update Policy button at the top of the Existing Overtime Policies screen to save your changes, or click on the Undo Changes button to exit without saving your changes.

 

Net Pay Calculations

As of TimeIPS v1.5, TimeIPS Overtime/Doubletime Net Pay Calculations are based on the following documentation taken from: http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_548/29CFR548.2.htm

(e) The basic rate so established is authorized by Sec. 548.3 or is authorized by the Administrator under Sec. 548.4 as being substantially equivalent to the average hourly earnings of the employee, exclusive of overtime premiums, in the particular work over a representative period of time;
(f) Overtime hours are compensated at a rate of not less than one and one-half times such established basic rate;
(g) The hours for which the employee is paid not less than one and one-half times such established basic rate qualify as overtime hours under section 7(e) (5), (6), or (7) of the Act;
(h) The number of hours for which the employee is paid not less than one and one-half times such established basic rate equals or exceeds the number of hours worked by him in any workweek in excess of the maximum workweek applicable to such employees under subsection 7(a) of the Act;
(i) The employee's average hourly earnings for the workweek exclusive of payments described in paragraphs (1) through (7) of section 7(e) of the Act are not less than the minimum hourly rate required by this Act or other applicable law;
(j) Extra overtime compensation is properly computed and paid on other forms of additional pay which have not been considered in arriving at the basic rate but which are required to be included in computing the regular rate.
[20 FR 5679, Aug. 6, 1955, as amended at 26 FR 7731, Aug. 18, 1961]