FLSA Overtime on Premium Pay

1
FLSA Overtime on Premium Pay

• Presented by
• Anita Gurule/Classified Pay Specialist
• Sue Hall/ Payroll Accountant

2
Fair Labor Standards Act (FLSA)

• Requires that certain types of employee
  compensation must be included in the calculation
  of overtime.
• Premium Pay

3
What is Premium Pay?

• Special pay give to employees for working
  weekends, late shifts, or other duties requiring
  additional compensation.
• Pay (Such as)
• Shift Differential, Confined Space, Electrician,
  Diving, High Work, Nuclear Reactor Licensing, and
  Hazard Material.

4
When and why is Overtime on Premium Pay
Calculated?

• Overtime is 1 ½ times the regular rate of pay.
  The calculation of regular rate is different when
  premium pay is included.
• This only applies to FLSA overtime hours, which
  is time worked in excess of 40 hrs per week.

5
How Much Should Be Paid?

• There are two methods you can use when
  calculating overtime on premium pay.
• Coefficient Table (is prepared by U.S.
  Department of Labor and is the most highly
  recommended method)
• Formula Method

6
Example Timesheet

• Does employee have overtime?
• Did the employee earn differential pay during
  FLSA overtime? (Hours over 40)

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Week 2 Calculation

• Employee worked 11 DSH. So amount of
  differential earned is
• ( 11 X .75 8.25)
• Employee worked 52.75 hrs that week, so we will
  need the coefficient for 52.75.
• Go to Coefficient Table

FLSA Hours Even 0.25 0.50 0.75 0.10 0.20
49 .092 .094 .096 .098 .0927 .0935
50 .10 .102 .104 .106 .1008 .1016
51 .108 .110 .112 .114 .1086 .1094
52 .115 .117 .119 .121 .1161 .119
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Amount Owed For Week 2

• Multiply 8.25 by .121 to get amount owed.
• 1.00 additional is owed to employee for overtime
  on premium pay (.998 is rounded up)
• During time entry you would enter the OTM, DSH,
  plus
• Earn Code Units Special Rate
• OTD 1 1.00

9
Week 3 Calculation

• Employee worked 19 DSH. So amount of
  differential earned is
• ( 19 X .75 14.25)
• Employee worked 59 hrs that week, so we will need
  the coefficient for 59.
• Go to Coefficient Table

FLSA Hours Even 0.25 0.50 0.75 0.10 0.20
57 .149 .151 .152 .154 .1497 .1503
58 .155 .157 .158 .16 .1558 .1564
59 .161 .162 .164 .165 .1616 .1622
60 .167 .168 .169 .171 .1672 .1678
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Amount Owed For Week 3

• Multiply 14.25 by .161 to get amount owed.
• 2.29 additional is owed to employee for overtime
  on premium pay
• ( In this case the employee has two weeks of
  OTD owed. You would enter the total amount of
  OTD owed for the whole month.)
• You would enter
• Earn Code Units Special Rate
• OTD 1 3.29 (1.00 2.29)

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Formula Method

• Total Premium Pay Earnings FLSA OT Hours
• Total of Hours Worked 2

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Week 2 Computation With Formula Method

• Total Premium Pay Earnings X FLSA OT Hours
• Total of Hours Worked 2
• 8.25 X 12.75 1.00
• 52.75 2

• You would enter
• Earn Code Units Special Rate
• OTD 1 1.00

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Co-efficient Table Recommended

• Why?
• Less chance of Error
• More accurate
• Saves time
• More convenient (available online)

14
Online link

• Information, examples, and the co-efficient table
  is available online under Computing FLSA
  Overtime on Premium Pay at
• http//oregonstate.edu/dept/budgets/PAYManual/PAY5
  01.htm

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• Questions?