Business Example 5 - Daily Overtime Plus Rule
This example covers these business needs:
- Employees are paid overtime premiums, at time and a half, for any eligible time they work beyond their scheduled time, up to 10 hours a day. After 10 hours a day, they are paid premiums at double time.
- Any eligible work that earns employees overtime premiums is only paid as an overtime premium.
- Overtime premiums are charged against the same jobs and departments as the work that earned the premium. If employees work in multiple jobs or departments, the premiums are paid proportionally against the different jobs or departments.
Configuration
Condition: Always True
Rule parameters:
| Parameter | Value |
|---|---|
| Hour Set Description | REG=0, OT1=600*, OT2=9999 |
| Work Detail Hour Types | REG, R1, OT1 |
| Work Detail Time Codes | WRK |
| Premium Hour Type | Assign hour type according to the Hour Set Description |
| Hour type marker for work details with overtime | PRO |
| Premium Time Code | Assign time code (WRK) |
| Premium Job | Allocate proportionally by job |
| Premium Department | Allocate proportionally by department |
The PRO hour type has a Multiple value of 0, which is set on the related configuration page.
See Payroll settings.
Results
5a - Employee earns overtime
In this example result, the employee is scheduled to work for 7 hours, from 10:00 to 17:00. The employee takes a half hour break at 13:00 and stays late, from 17:00 to 19:00, to attend a departmental meeting.
The employee worked for 8.5 hours, but was only scheduled for 7, earning 1.5 hours of overtime. Through the Premium Job and Premium Department parameters, the rule is configured to pay the premium proportionally against the same jobs and departments as the time that earned the overtime.
The employee reported 6.5 hours of eligible time against the SUPERVISOR job, and 2 hours against the MEETING job. Or, roughly 76% of the eligible work was in the SUPERVISOR job, and 24% in the MEETING job.
The rule pays 1.5 hours of overtime premiums, but as 2 premiums against different jobs. The premium time is split in the same proportions, and 1 hour and 24 minutes is paid against the SUPERVISOR job while 6 minutes is paid against the MEETING job. The rule also changes the hour type of the work details that earned the premiums to PRO.
These tables summarize the employee’s pay before and after the overtime is paid.
Before overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 8.5 | WRK | REG | Regular rate at $20 an hour | $170 |
| .5 | BRK | REG | Regular rate at $20 an hour | $10 |
| Total: | $180 |
After overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 7 | WRK | REG | Regular rate at $20 an hour | $140 |
| .5 | BRK | REG | Regular rate at $20 | $10 |
| 1.5 | WRK | PRO | Unpaid | $0 |
| 1.5 | WRK | OT1 | Premium time and a half overtime rate at $30 an hour | $45 |
| Total: | $195 |
5b - Employee Earns Double Time Against Different Jobs and Departments
In this example result, the employee is scheduled to work for 7 hours, from 10:00 to 17:00. The employee takes a half hour break at 13:00 and stays late, from 17:00 to 22:00, to attend two meetings, one in the SALESSPT department and one in the INSIDESALES department.
The employee was scheduled for 7 hours, but worked 11.5 hours. This schedule earns the employee 4.5 hours of overtime. 1.5 hours of the overtime was above the 10-hour threshold, earning the employee double time.
The employee recorded the eligible work against three sets of labor metrics:
- 6.5 hours against the SUPERVISOR job and SALESSPT department.
- .5 hours against the MEETING job and SALESSPT department.
- 4.5 hours against the MEETING job and INSIDESALES department.
The rule pays 3 hours in premiums at the OT1 rate, and 1.5 hours of premiums at the OT2 rate. To pay this time proportionally against both jobs and departments, the rule creates 6 different premiums, 3 premiums (one for each set of labor metrics) at the OT1 rate, and 3 more for the OT2 rate.
Although more complex than the previous example result, the calculations to determine the length of the premiums are the same, regardless of the number of different sets of labor metrics. The rule:
- Calculates the percentage of eligible time the employee recorded against each set of labor metrics. So, 6.5 hours of 11.5 total eligible time was recorded against the SUPERVISOR job and SALESSPT department, roughly 57%.
- Calculates the amount of overtime the employee earned at each rate (3 hours at OT1 and 1.5 hours at OT2).
- Multiplies the amount of overtime against the percentage of each set of labor metrics. So, 57% of the 3 hours at OT1 is a 102 minute (1 hour and 42 minutes) premium with the OT1 rate, paid against the SUPERVISOR job and SALESSPT department.
The result of these calculations is 6 premiums, paid proportionally against the labor metrics of the time that earned them. The rule also changes the hour type of the work details that earned the premiums to PRO.
These tables summarize the employee's pay before and after the overtime is paid.
Before overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 11.5 | WRK | REG | Regular rate at $20 an hour | $230 |
| .5 | BRK | REG | Regular rate at $20 an hour | $10 |
| Total: | $240 |
After overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 7 | WRK | REG | Regular rate at $20 an hour | $140 |
| .5 | BRK | REG | Regular rate at $20 an hour | $10 |
| 4.5 | WRK | PRO | Unpaid | $0 |
| 3 | WRK | OT1 | Premium time and a half overtime rate at $30 an hour | $90 |
| 1.5 | WRK | OT2 | Premium double time overtime rate at $40 an hour | $60 |
| Total: | $300 |