Business Example 3 - Weekly Overtime Plus Rule
This example covers these business needs:
- Labor legislation states that employees must earn an overtime rate of one and half their normal rate if they work more than 40 hours in one week.
- As an incentive, the company pays employees at one and half their normal rate whenever they work more than 10% longer than their regular work week. Employees work part-time, in shifts. Their regular work weeks can be 10, 15, or 20 hours in length. The specific length for each employee is defined in the application.
- By default, employees earn overtime after 22 hours. The overtime rate is paid on the time which earned employees the overtime.
- If employees work longer than 40 hours in one week, they are paid overtime according to the labor legislation.
- The work week starts on Sunday.
- Unpaid time spent in training counts toward the duration of an employee’s worked time, but employees do not earn overtime on the training time.
Configuration
First instance of the Weekly Overtime Plus Rule:
The first instance of the rule satisfies the labor legislation requirement. The parameters of the first condition set are applied first. If an employee earns overtime, the rule converts the eligible hour types to WRG and WOT, which are not eligible hour types in the second instance of the rule. This rule ensures that employees who work longer than 40 hours in one week are paid overtime according to the labor legislation and not paid overtime again for the time they worked beyond 10% longer of their regular work week.
Condition: Always True
Rule parameters:
| Parameter | Value |
|---|---|
| Hour Set Description | WRG=2400, WOT=9999 |
| Work Detail Hour Types | REG, WRG, WOT |
| Work Detail Time Codes | WRK |
| Protected Work Detail Hour Types | UNPAID |
| Protected Work Detail Time Codes | TRN |
| Eligible Overtime Period | Week |
| Day Week Starts | Sunday |
Second instance of the Weekly Overtime Plus Rule:
The second instance of the rule satisfies the pay incentive requirement.
Condition: Always True
Rule parameters:
| Parameter | Value |
|---|---|
| Hour Set Description | REG=EMP_VAL1(1.1)|1320, OT1=9999 |
| Work Detail Hour Types | REG, OT1 |
| Work Detail Time Codes | WRK |
| Protected Work Detail Hour Types | UNPAID |
| Protected Work Detail Time Codes | TRN |
| Eligible Overtime Period | Week |
| Day Week Starts | Sunday |
Additional configuration:
The Auto Recalc parameter in the Quick Rule Editor is set to ENTIRE WEEK.
On each employee’s configuration page (), the Val 1 field contains the duration (in minutes) of an employee’s work week.
Results
3a - Employee earns overtime
In this example result, the employee's regular work is 15 hours and earns overtime after 16.5 hours (10% longer than 15 hours). The employee is scheduled to three 5 hour shifts, from 12:00 to 17:00, Monday, Tuesday, and Wednesday. The employee stays an hour late on Tuesday and Wednesday for unpaid training.
The employee works 15 hours of eligible time, and spends an additional 2 hours in training, which counts toward the employee's work week. The employee works less than 40 hours a week, so the first instance of the rule does not assign any overtime.
The employee earns overtime after 16.5 hours, and worked 17, earning 30 minutes of overtime from the second instance of the rule.
Since the Allocate overtime based on the schedule check box is cleared, the rule applies the overtime rate to the work which earned overtime. The last 30 minutes the employee worked in the week earned overtime, however the overtime was unpaid time, spent in training. Since unpaid training is configured as protected time, the rule does not pay the overtime on the training time. Rather, the rule assigns the overtime rate to the last 30 minutes the employee spent working on Wednesday.
These tables summarize the employee's pay for the week before and after the overtime is paid.
Before overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 15 | WRK | REG | Regular rate at $10 an hour | $150 |
| 2 | TRN | UNPAID | Unpaid | $0 |
| Total: | $150 |
After overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 14.5 | WRK | REG | Regular rate at $10 an hour | $145 |
| 2 | TRN | UNPAID | Unpaid | $0 |
| 0.5 | WRK | OT1 | Overtime rate at $15 an hour | $7.50 |
| Total: | $152.50 |
3b - Employee does not have a regular work week defined
In this example result, the employee has not been configured with a defined regular work week (on the employee's configuration page, the Val 1 field is blank). The rule assumes the employee earns overtime after 22 hours. The employee works three 5 hour shifts, from 12:00 to 17:00, Monday, Tuesday, and Wednesday. The employee stays an hour late on Tuesday and Wednesday for unpaid training.
The employee works 15 hours of eligible time, and spends an additional 2 hours in training, which counts toward the employee's work week. Since the employee's worked time is 17 hours this week, less than the 40 hours a week and the default 22 hours the employee must work to earn overtime, neither instance of the rule assigns any overtime to the employee.
3c - Employee works longer than 40 hours
In this example result, the employee's regular work is 15 hours and earns overtime after 16.5 hours. Due to short staff levels, the employee is asked to work long shifts and come in on days off. The employee works 10 hours on Monday to Thursday, and 3 hours on Friday.
The employee works 43 hours of eligible time. 26.5 hours are beyond 10% longer than the employee's regular work week. However, the employee has worked 3 hours longer than 40 hours, so the labor legislation rule applies. Since the first instance of the rule is applied first, the rule assigns 3 hours of overtime.
The rule also converts the remaining 40 hours of eligible time to the WRG hour type.
The application applies the parameters of the second Weekly Overtime Plus rule next, but the employee does not have any eligible work details, based on the hour types. The second instance of the rule does not assign any additional overtime.
These tables summarize the employee's pay for the week before and after the overtime is paid.
Before overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 43 | WRK | REG | Regular rate at $10 an hour | $430 |
| Total: | $430 |
After overtime:
| Hours | Time Code | Hour Type | Rate | Paid |
|---|---|---|---|---|
| 40 | WRK | WRG | Regular rate at $10 an hour | $400 |
| 3 | WRK | WOT | Overtime rate at $15 an hour | $45 |
| Total: | $445 |