Introduction
Once enabled, overtime rules warn you of overtime in your schedules prior to publishing and also warn you in timecards when workers have gone over their daily or weekly limits. Overtime rules not only warn you but also calculate the cost associated with overtime.
Companies can specify when overtime is applied (if at all), and how much is to be paid when it occurs.
Overtime requirements may be defined under federal or state legislation. Alternatively, overtime may be defined by a company's own policy.
Note that overtime rules are defined at the Company level. Once a rule is turned on the rule applies to all workers by default. Exceptions to these rules may be defined by creating custom compliance rule groups.
Prerequisite
Premium subscription
Administrator access
'Start day of week' has been set for the company
'Start time of day' has been set for each worker
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Overtime rules
SocialSchedules supports four types of overtime:
Daily overtime
Daily (double) overtime
Weekly overtime
Maximum consecutive days
Administrators can choose to toggle each rule ON or OFF. They can then further define how the overtime rule is to be implemented.
Daily overtime
Daily overtime is when a worker works more than a certain number of hours in a day and is entitled to additional pay as compensation.
For example, if a worker works more than 10 hours in a day they may be paid 150% of their base pay rate for the hours worked after 10 hours.
For the purposes of calculating daily overtime, a day is defined as a 24-hour period starting from the start of the employee's day, as defined in their employee profile. For example, an employee's day may start at 12pm, running through to 11:59:59am the following day.
Daily (double) overtime
Daily (double) overtime can be toggled on when there is more than one set of rules for daily overtime.
For example:
Employees may earn 150% of their base rate when working more than 8 hours/day. (Daily overtime).
Employees may then earn 200% of their base rate when working more than 12 hours/day. (Daily double overtime).
In this example:
Employees will earn their base pay rate for the first 8 hours worked in a day
Employees will then earn 150% of their base rate for the hours worked between the 8th and 12th hours on a day
Employees will then earn 200% of their base rate for the hours worked between the 12th and 24th hours on a day
Weekly overtime
Weekly overtime is when an employee works more than a certain number of hours in a week and is entitled to additional pay as compensation.
For example, if an employee works more than 40 hours in a week they may be paid 150% of their base pay rate for the hours worked after 40 hours.
For the purposes of calculating weekly overtime, a week is defined as a 7 day period. It starts on the company's start day of week, as defined in the company's profile, and at the start time of day, as defined in their employee profile.
For example, an employee's week may start on a Tuesday at 3pm, running through to 2:59:59pm the following Tuesday.
Where an employee is eligible for both daily overtime and weekly overtime, hours are only counted towards one overtime payment.
For example, assume a company has the following overtime rules enabled:
Employees are entitled to 150% base pay rate for hours worked after 8 hours on a day
Employees are entitled to 150% base pay rate for hours worked after 40 hours in a week.
In a given week, employee X works:
12 hours on a Monday
8 hours on Tuesday
8 hours on Wednesday
8 hours on Thursday
8 hours on Friday
Their week starts at 12am on Mondays.
In our example, the employee has worked:
4 hours of daily overtime on Monday (12 hours total on the day)
4 hours of weekly overtime (44 hours total in the week)
The 4 hours of daily overtime on Monday would be calculated at 150% of the employee's base rate. Now that it has already been paid as overtime, it is removed from the calculation for weekly overtime.
This reduces the employee's weekly hours, which are considered for weekly overtime, to 40 hours. As this is not more than 40 hours, the employee is not paid weekly overtime.
Maximum consecutive days
The maximum consecutive days rule is when an employee is entitled to additional compensation because they have worked a defined number of days in a row in the same workweek.
For example, an employee may be eligible for 150% of their base pay for all hours worked on the 7th consecutive day of the workweek.
Californian exception - In the state of California workers are exempt from this rule if they work less than or equal to 30 hours for the workweek and no more than 6 hours on any workday; select the check box if you would like to apply this exception.
For the purposes of calculating the maximum consecutive days rule the company's start day of week and employee's start time of day are considered, as defined in their employee profile.
For example, an employee's week may start on a Tuesday at 3pm, running through to 2:59:59pm the following Tuesday.
If the employee worked Tuesday, Wednesday, Thursday, Friday, Saturday, Sunday, and Monday, this is considered 7-day consecutive days.
If the employee worked Thursday, Friday, Saturday, Sunday, Monday, Tuesday and Wednesday, and then had Thursday off, this is not considered 7 consecutive days. This is because the consecutive days were in separate workweek: 5 days in workweek 1, and 2 days in workweek 2.
Additional California requirement: Also note that in the state of California, "any work in excess of eight hours on any seventh day of a workweek shall be paid no less than twice the regular rate of pay".
Using the Max Consecutive Days rule, SocialSchedules can flag when a worker works 7 consecutive days. The timecard can then be manually adjusted if required, depending on the hours worked on this day.
For example:
Assuming the Max Consecutive Days rule is set at 'Pay 150% on the 7th day'
Worker in California works 7 consecutive days
On their 7th consecutive days, they work 10 hours.
The worker's timecard will show the full 10 hours at 150% of the base daily rate
A manager or administrator will need to adjust the timecard so the last 2 hours (hours 8 - 10) are paid at 200% of the daily base rate, rather than 150%.
Pay by
When an employee has worked in different positions with different pay rates across an overtime period, companies can choose to calculate the overtime in one of two ways:
Hours worked
Regular rate of pay
Hours worked
In this payment method, overtime is calculated directly based on the pay rate for the hours worked in overtime.
Assume the following scenario:
John worked 9-5 on Monday as a Baker at $20/hour
He then worked 5-9 on Monday as a Janitor at $22/hour
Daily overtime is applied after 8 hours, calculated at 200% of the base rate
Here, because John was working as a Janitor earning $22/hour during the 4 hours that were considered overtime, his overtime is paid at $22 x 200%
8 hours are paid at $20 = $160
4 hours are paid at $22 x 200% = $176
Total earnings for the day: $336
Regular rate of pay
In this payment method, overtime is calculated based on the average pay rate for the period (either daily or weekly, depending on the scenario).
Take the scenario above again:
John worked 9-5 on Monday as a Baker at $20/hour
He then worked 5-9 on Monday as a Janitor at $22/hour
Daily overtime is applied after 8 hours, calculated at 200% of the base rate
Now, we need to calculate John's 'regular rate of pay' for the day. This is effectively the 'average' pay rate per hour.
(8 x $20) + (4 x $22) / 12 = $20.66
With this example, it does not matter what John was earning during the hours that were considered overtime. Overtime is calculated based on his regular rate of pay.
8 hours are paid at $20 = $160
4 hours are paid at $20.66 x 200% = $165.28
Total earnings for the day: $325.28
Warnings and restrictions
For each overtime rule, companies can choose what should happen when the defined scenarios occur during scheduling. The options are:
Restrict from schedule (do not allow the creation of a shift which incurs the overtime rule)
Mark as warning (apply a warning to the shift (and timecard, should it eventuate)). Schedules and timecards can then be filtered to show only those with warnings, so corrective action can occur if required.
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