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What is your 30-day workforce management plan?

As you start to plan for the weeks and months ahead, we would like to help by offering a complimentary Workforce Realignment Feedback Session with our HCM Analytics team.

During this session, our HCM Analytics team will:

  • Discuss your current plans for workforce changes to manage the next 30 to 90 days and provide feedback on potential risks and opportunities
  • Identify targeted areas where you could potentially reduce your labor costs while minimizing long-term damage
  • Suggest key metrics for you to track so you can forecast labor costs better and make earlier interventions

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Calculating Overtime Can Get Complicated

overtime calculation
There are several rules that must be followed when calculating overtime pay. Hours considered to be overtime hours are any hours worked over 40 hours in one week. The first 40 hours of work each week are referred to as regular hours, and any hours worked after that are considered overtime hours. For example, if an employee works 46 hours in one week, the employee must be compensated for 40 hours of regular time and 6 hours of overtime.

It’s important to remember that when calculating overtime wages, each week is separate from the following week. You cannot average the amount of hours an employee works over multiple weeks or months. For example, if an employee worked 36 hours one week, and 44 hours the next, you still must pay your employee 4 hours in overtime wages. Even if the employee averaged 40 hours over a two week period, overtime is calculated on a week to week basis.
Additionally, only actual hours worked are counted when determining overtime. For instance, if an employee worked 36 hours Monday through Thursday, and takes a vacation day on Friday, the employee is not owed overtime.

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How to Calculate Overtime for Hourly Employees 

1. Determine the regular rate of pay. This is the gross hourly rate at which the employee is paid for his or her normal work hours. This rate can be found on an employee’s pay stub.

2. Determine the overtime rate of pay. This is done by multiplying the employee's regular rate of pay by 1.5.

3. Determine the amount of overtime pay that is due by multiplying the overtime rate of pay by the number of overtime hours worked.

How EPAY Can Help
EPAY Systems offers a cloud based time and attendance system that helps eliminate manual overtime calculations. Learn more about how we can help you maintain overtime compliance, or download the report, Top 5 Ways Not to Get Sued to learn best practices for avoiding wage and hour lawsuits.