Configure Coefficient Overtime Earnings and Pay Statements

Coefficient Overtime

Coefficient Overtime is the calculation of overtime defined by the Wages and Fair Labor Standards Act (FLSA).

The coefficient overtime rate of pay is an equivalent rate of all earnings made that are subject to FLSA standards. The calculation includes all earnings configured for FLSA for an employee divided by the total hours worked. If an employee works more than one job type at different pay rates, the overtime rate is the weighted average of those jobs. Shifts are included in the overtime calculation if flagged.

Payments not subject to the FLSA earnings standards include:
  • Pay for expenses incurred on the employer's behalf
  • Premium payments for overtime work or the true premiums paid for work on Saturdays, Sundays, and holidays
  • Discretionary bonuses
  • Gifts on special occasions
  • Payments for occasional periods when no work is performed due to vacation, holidays, or illness

Configure Coefficient Overtime Earnings Calculation

Create a coefficient overtime earnings using the coefficient calculation rule. Associate this calculation to any earnings that are subject to the Wages and Fair Labor Standards Act (FLSA) standards.

Menu > System Configuration > Business Rules
  1. From the Business Rules page, select Earnings.
  2. From the Earnings page, select Add.
  3. From the Main page, complete the required fields.
  4. In General Information, check the Overtime box.
  5. In Rules, in the Calculation drop-down list, select Coefficient OT.
  6. At the Rate Factor field, enter the appropriate rate factor. The following examples show possible rate factors:
    • For time and a half, enter a rate factor of 0.5.
    • For double-time, enter a rate factor of 1.Earnings Configuration Main Page with Selections for Coefficient Overtime Calculation
  7. Select Next.
  8. From the Tax page, complete the required fields and select Next.
  9. From the Detail page, complete the required fields.
  10. In Include Earning In, uncheck the FSLA Average Pay Rate Dollars and FLSA Average Pay Rate Hours boxes.
    The FSLA boxes are checked for earnings that are to be subject to the coefficient overtime standards, not the calculation rule. Details page with unchecked FLSA boxes

Configure Earnings to Qualify for Coefficient Overtime Calculation

Configure earnings that are subject to the Wages and Fair Labor Standards Act (FSLA) overtime standards. Associate those earnings to the coefficient overtime calculations earnings rule.

Menu > System Configuration > Business Rules
  1. From the Business Rules page, select Earnings and then select the appropriate earnings code.
  2. From the Earnings Setup page, select Next.
  3. From the Tax page, select Next.
  4. From the Detail page, in Include Earning In, check the following boxes:
    • FLSA Average Pay Rate Dollars
    • FLSA Average Pay Rate HoursEarnings Details Configuration with checked FLSA boxes

Configure Detailed Overtime and Shifts on Pay Statements

Overtime earnings and corresponding shifts can appear on employee pay statements in an easy-to-read format.

Configure Shift/OT Settings from the Pay Group Options page. Assign Shift/OT Settings according to pay group and check type. The shift and corresponding overtime earnings must have the same Charge Date, Job, and Shift. When the Detailed Shifts & OT Rate of Pay option is assigned:

  • Shifts appear below the overtime earnings
  • Overtime hours are subtracted from the regular earnings hours when the overtime earnings is configured with the Overtime indicator enabled.
    Note If the Overtime indicator is not selected in the Earnings setup, the earnings will not be reduced from the regular hours.
  • Overtime pay rate appears as a combined time and a half rate (or other rate)
Pay Statement with Detailed Shifts and OT Example

When the Detailed Shifts option is assigned and overtime pay is applied, but no shifts are paid, the overtime pay displays without a corresponding shift.

Pay Statement with Overtime Hours and No Associated Shift

Navigation:Menu > Administration > Payroll Admin > Pay Statement Options > Pay Group Options

  1. From the Pay Group Options page, view the Shift/OT Settings column.
  2. Select Detailed Shifts & OT Rate of Pay for each pay group and check type.
    Pay Groups with Detailed Shifts & OT Rate of Pay Selected for Pay Statement Display
  3. Select Save.
    Shifts, listed below the earnings on online and printed pay statements, provide a combined overtime rate of pay.
  4. During payroll, assign each overtime earnings to the corresponding shift.
    • Job: If working multiple jobs, assign the same overtime and shift earnings to the job.
    • Charge Date: Assign the charge date to each earnings to designate the week's earned wages and overtime.
    View/Change Employee Pay Check with Configured OT and Shifts Example

Pay Statement Examples with Configured Overtime

The following examples show possible pay statements for a full-time employee who works 45 hours in a week (which includes 5 hours of overtime). Each pay statement example is a different configuration of the same scenario.

Example Pay Statement with Two Configured Earnings and Detailed Shifts & OT Rate of Pay Option Enabled

The following example shows a pay statement with two earnings configured, regular pay and coefficient overtime.

Example Pay Statement with Two Configured Earnings and Detailed Shifts & OT Rate Enabled

Example Pay Statement with Three Configured Earnings and Detailed Shifts & OT Rate of Pay Option Disabled

The following example shows an example of a pay statement with three earnings configured:
  • Regular Earnings – Typically, 40 hours.
  • Overtime (Straight) Earnings - Shows the number of hours worked at the overtime rate.
  • Coefficient Overtime - Shows the premium overtime earnings rate and amount.
Note In this example, the overtime rate of pay is disabled.
Example Pay Statement with Three Configured Earnings and Detailed Shifts & OT Rate Disabled

Example Pay Statement with Three Configured Earnings and Detailed Shifts & OT Rate of Pay Option Enabled

The following example shows an example of a pay statement with three earnings configured:

  • Regular Earnings – Typically, 40 hours, but the number of hours for Coefficient Overtime is subtracted from the regular earnings total.
  • Overtime (Straight) Earnings - Show the number of hours worked at the overtime rate.
  • Coefficient Overtime - Shows the employee’s pay rate and the premium overtime earnings amount.
Note In this example, the overtime rate of pay is enabled.
Example Pay Statement with Three Configured Earnings and Detailed Shifts & OT Rate Enabled

Configure the Detailed Overtime Look-Back Calculation on Pay Statements

A payroll administrator can configure pay statements to display overtime look-back details on pay statements.

Navigation:Menu > Administration > Payroll Admin > Pay Statement Options > Pay Group Options

When non-discretionary bonus earnings are configured with coefficient overtime look-back, the pay statement displays the adjusted earnings start and end dates separate from the bonus period. The coefficient overtime look-back details are displayed on printed and online pay statements.

  1. On the Pay Group Options page, for the appropriate pay group, check the Enable Earnings Detail box.
  2. In the Shift/OT Settings column, select Detailed Shifts & OT Rate of Pay, as needed.
  3. Check the Display Charge Date/Week box, as needed.
  4. Check the Display OT Look-Back Detail box.
  5. Select Save.
    An example of a pay statement configured with coefficient overtime look-back detail calculations

    Once configured, the pay statement displays the breakdown calculation of any non-discretionary bonus. The total coefficient overtime paid bonus earnings is updated in the Year-to-Date column.

    An example of a pay statement with multiple Coefficient Overtime look-back calculation details

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