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FLSA Overtime on Premium Pay

FLSA Overtime on Premium Pay. Presented by: Anita Gurule/Classified Pay Specialist Sue Hall/ Payroll Accountant. Fair Labor Standards Act (FLSA). Requires that certain types of employee compensation must be included in the calculation of overtime. Premium Pay. What is Premium Pay?.

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FLSA Overtime on Premium Pay

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  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)

  7. 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:

  8. 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 CodeUnitsSpecial 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:

  10. 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 CodeUnitsSpecial Rate OTD 1 $3.29 ($1.00+ $2.29)

  11. Formula Method Total Premium Pay EarningsFLSA OT Hours Total # of Hours Worked2

  12. 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 CodeUnitsSpecial Rate OTD 1 $1.00

  13. 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/PAY501.htm

  15. Questions?

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