October 31, 2011
Weekly Overtime and Irregular Pay Periods
Report Run Tuesday to Sunday
Above you can see a working hours report run for a period from Tuesday 11 October through to Sunday 16 October. In this case our multi-user time clock software is setup with the first day of the week being Monday and to adhere to California Overtime Rules, with overtime paid after 8 hours in a day and after 40 normal hours in a week.
Close examination of the Weekly OT Hours column shows what appears to be, at first glance, what appears to be a mistake. On Saturday 15 October the software has calculated that the 6 work hours are all to be paid at Weekly OT rates. However, if we add up the hours in the Normal Hours column it appears that this employee has only worked 32 normal rate hours to that point, which clearly doesn't exceed the 40 hour limit stated above. So what is going on here?
What is going is that even though the report isn't showing the times for Monday 10 October Time Clock MTS is still taking those hours into account to calculate the weekly overtime. Let's look at the report including Monday's data.
Report Run Monday to Sunday
We can see that the employee has worked 11 hours on Monday. This takes the normal hours tally for Saturday 15 October up to 40 hours and Time Clock MTS is indeed correct in calculating those 6 hours as weekly overtime.
I've written about this example to highlight that Time Clock MTS calculates weekly overtime using ALL of the data from a given week regardless of the report period you've chosen to display. This is of particular importance to employers who use irregular pay periods like bi-monthly or monthly. Employers with pay periods like these that do not always start on the same weekday could easily end up with cases where hours from the previous pay period impact on overtime calculations for the current pay period.
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Posted by mnemtsas at October 31, 2011 10:44 AM