All calculation types may not be available for your payroll platform. Please contact your Paychex representative for additional information.
Federal and State wage and hour laws.
Several calculation types are available in the system to help determine overtime earnings.
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All calculation types may not be available for your payroll platform. Please contact your Paychex representative for additional information. |
Standard or premium overtime
This calculation may be used when overtime is based solely on the employee's hourly rate, and the employee has only one rate; the standard rate is multiplied by overtime hours, then multiplied by an overtime factor.
Average hourly overtime rate
This calculation may be used when an employee is paid on a piecework, salary or commission basis. It averages the regular earnings and hours and multiplies that amount by an overtime factor.
Weighted half-time overtime
This calculation may be used when an employee is paid various rates of pay. It multiplies overtime hours by a weighted hourly rate and divides this amount by 2.
Weighted time-and-a-half overtime
This calculation may be used when an employee is paid various rates or amounts of pay. It multiplies overtime hours by a rate based on the standard hourly rate plus a weighted hourly rate divided by 2.
Commission overtime premium calculation
This calculation may be used for commissioned employees who work overtime. It multiplies overtime hours by an overtime premium rate, which is based on the standard overtime rate plus the average hourly commission earnings divided by 2.
Tip credit overtime
The FLSA allows employers to take a tip credit towards minimum wage for tipped employees. This calculation may be used when tipped employees work overtime. It calculates overtime earnings based on the minimum wage where “tip credit” is used.
Contact your Paychex representative if you need assistance setting up any of the above overtime calculations based on the facts and circumstances of your payroll.
Some employees are exempt from the overtime pay provisions and some employees are exempt from both the minimum wage and overtime provisions of the Fair Labor Standards Act (FLSA).
Exemptions are narrowly construed against the employer asserting them. Employers should always closely check the exemption in light of the employee's actual duties before assuming that the exemption might apply to the employee. The ultimate burden of supporting the actual application of an exemption rests on the employer. For additional information, refer to www.dol.gov.
A list of commonly used FLSA exemptions can be found at: http://www.dol.gov/elaws/esa/flsa/screen75.asp
State exemptions from minimum wage and overtime may be different than federal.
The Fair Labor Standards Act (FLSA) states that non-exempt employees are entitled to receive one and one-half times their regular rate of pay for all hours worked over 40 in a workweek.
Each state may establish its own overtime requirements. If a state law is more demanding than federal law and an employer is covered by both, the employer must follow the state law. If the state law is less demanding than federal law or if there is no state law provision and the employer is subject to the FLSA, the employer must follow the federal requirements.
The FLSA covers most employers and employees. Clients should contact the Department of Labor if they have any questions about whether they are subject to the requirements of the Act.
Unions and other professional associations may dictate additional overtime pay requirements.
An employer’s failure to meet FLSA overtime requirements may result in a civil penalty of up to $1,100 per violation and payment of back wages owed. Individual states may charge additional penalties.
Refer to the US Department of Labor or your state for specific overtime requirements.