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Overtime Rules: The Setup

Overtime Rules are used to change the rate of pay for employee automatically based on the number of hours they exceed a threshold of hours worked during a period of time.

During this guide the 8/44 Overtime Rule will be discussed and implemented using Overtime Rules.

The 8/44 overtime rule, pays 1.5 times the employees basic rate when more than:

  • 8 hours are worked in a single day, or

  • 44 hours are worked during a week.

Note:
When both daily and weekly overtime rules would apply, the larger of the two will be counted and not both.

Overtime Rule

  1. Open Time and Attendance > Installation & Maintenance > Overtime Rules.

  2. Create a new Overtime Rule by pressing Insert.

Overview

The 8/44 overtime rule will use two intervals to determine when overtime will be paid per-day and per-week. When you have completed the guide, the overtime rule should look similar to the one below.

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1
Overtime Rule, Description

The name of the Overtime Rule and the Description are entered here

Processing Order

The order that time is processed for overtime can be changed here.

2
Details

From the Details tab, the intervals when overtime will be paid can be created and maintained.

Daily Interval

The daily interval should apply overtime pay when more than 8 hours are worked in any given day.

  1. Add a new interval from the Details tab of the Overtime Rule by pressing Insert.

  2. From the Details tab, the daily interval will be setup to apply on any day of the week. The Earning Code used to pay overtime is selected here as well (see Daily Details).

  3. From the Threshold tab, the 8-hour limit on hours worked before overtime is paid will be setup (see Daily Threshold).

Daily Details
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1A Daily interval is used for the per-day overtime rule.
2All days all applicable for overtime.
3An appropriate Earn Code is selected to pay the overtime on.
4The overtime accumulator used by the Earn Code will be displayed here.
Overtime Accumulator

If the overtime accumulator is not setup correctly on the overtime interval Earning Code, the overtime hours will not be calculated correctly when overtime rules are applied.

Daily Threshold
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1Selecting Number for the Threshold Source allows the hours and minutes for the overtime threshold to be entered below.
2The daily maximum for the 8/44 overtime rule is 8 hours.

Weekly Interval

The weekly overtime interval will be setup much the same as the daily interval. The key differences are that the interval is setup as Weekly, and the threshold is 44 hours.

Weekly Details
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1A weekly interval is used for the per-week overtime rule.
2This rule will be applicable for any week.
3An appropriate Earn Code is selected to pay the overtime on.
4The overtime accumulator used by the Earn Code will be displayed here.
Important

The overtime accumulator for the weekly interval should be the same as the daily interval accumulator.

Applicable weeks

The Applicable field of the weekly overtime rule can be used to specify which week of a number of weeks the rule will apply.

  • Zero indicates all available weeks.

  • By default, all weeks will be applicable ( 0 (all) of 1 ).

Examples
1 of 2The first week of every two weeks.
2 of 3The second week of every three weeks.
Weekly Threshold
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1Selecting Number for the Threshold Source allows the hours and minutes for the overtime threshold to be entered below.
2The weekly maximum for the 8/44 overtime rule is 44 hours.
First day of the week

When an interval other than Daily it is important to know what day of the week will be the start of the interval. Conveniently, this can be reviewed from the aptly named Interval Start Dates tab of the Overtime Rule.

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To change the interval start date:

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  1. Open Time and Attendance > Installation & Maintenance > Work Groups.

  2. Open the Work Group to maintain.

  3. Open the Details tab and change the Interval Start Date as required. (The current day of the week is displayed to the right).

Assign Overtime Rules to Work Groups

The last thing to do after creating an overtime rule is to apply it to a Work Group so that it can actually be used. Overtime Rules on a Work Group are automatically applied when Time Data is approved within Maintain Time Data.

  1. Open Time and Attendance > Installation & Maintenance > Work Groups.

  2. Open the Work Group to add the overtime rule to:

    1. From the Details tab, select the Overtime Rule from the drop down.

  3. Save the changes by pressing OK.

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Overtime in action

When time is processed from Maintain Time Data the overtime rules will be applied automatically.

The following weekly schedule contains two shifts that would qualify for overtime according to the 8/44 overtime rule.

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1Monday qualifies for overtime because the number of hours worked in that day exceeds 8 hours.
2Friday qualifies for overtime because the number of hours worked in the week exceeds 44 hours.

When the time is approved in Maintain Time Data the overtime rules are applied and the overtime hours are generated automatically.

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1On Monday, 2 hours of overtime are generated because the daily maximum was exceeded.
2On Friday, 4 hours of overtime are generated because the weekly maximum was exceeded.

Overtime Accumulators

Overtime accumulators are used to keep track of which hours worked during a shift should be considered normal pay, and which should be overtime pay. Making things slightly more complicated is that within hours that are considered overtime, some of those hours may be paid at a higher rate than others.

For example, in British Columbia the overtime regulations (as of 2018) mandates two overtime rates for hours during the same day.

Overtime in British Columbia
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11.5 times on the first 4 hours worked after 8 hours in a day, and
22.0 times on any hours beyond 12 hours in a day.
3Any hours worked beyond 40 hours in a week are paid at 1.5 times.

Below is an example shift that an employee worked 14 hours in total. The first 8 are paid as regular earnings, with the next 4 paid at 1.5 times, and the final 2 hours are paid at 2.0 times.

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This works because the Earning Code for the two overtime pays are setup to use different accumulators, with Overtime 1.5 accumulating under the Time and One-Half accumulator, and Doubletime 2.0 accumulating under the Double Time accumulator.

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Overtime accumulators are tiered, so hours accumulated in a lower tier will be included with the hours of the accumulator above it. (Time and One-Half hours will count towards Double Time hours, but not vice-versa.)
J
Jack is the author of this solution article.

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