The Overtime Calculation works like this:
 
  1. Tabulate all Hours Worked for the work week (SUN – SAT)
  2. Tabulate any instances where DAILY Overtime or Doubletime was incurred because they worked more than 8/12 hours
    1. AK, CA, CO, NV, PR, VI
  3. Tabulate instances of DAILY Overtime in RI (Sundays and specified holidays)
  4. Tabulate instances of DAILY Overtime based on special rules
    1. CA – 7th day
    2. KY – 7 day
    3. PR – 7th day
    4. VI – 6th and 7th day
  5. Tabulate how much WEEKLY Overtime the rep earned
  6. Determine total Overtime/Doubletime hours owed based on DAILY and WEEKLY (without double-counting).
  7. Calculate the AVG Pay Rate by dividing the Taxable Earnings by Hours Worked
    1. SPECIAL LOGIC:  In CA, you cannot include Overtime and Doubletime hours in the denominator for BONUS wages, so it would just be regular hours as the denominator
    2. In all other states, you can divide total taxable earnings by total Hours Worked
  8. Create the Overtime records.
  9. Create the Doubletime records.
  10. If there were any changes to the hours worked *OR* additional compensation that came in after we had paid Overtime, we will recalculate everything and create an Overtime Adjustment record to compensate for the variance.  If the Overtime Adjustment would REDUCE the amount we already paid the rep, we will not process it.  That is – we never take money away for Overtime Adjustments.
So, in a simple example, if you had a situation where a rep worked:
 
  • 50 hrs @ $15.00/hr
  • Received a $100 Bonus during this week
  • Had 10 hours of OT
  • No doubletime (but the calc is similar to below)
In CA, the calculation would work like this:
 
  • REGULAR PAY:                50 hrs @ $15.00/hr = $750.00
  • BONUS PAY:                     1 @ $100 = $100.00
  • AVG RATE OF PAY:         $750.00 / 50.00 = $15.00/hr   +   $100.00/40.00 = $2.50  =  $17.50/hr
 
The nuance here is that the AVG RATE of pay in CA calculates labor and bonus in different ways to determine the rate.
So, at this point, we can calculate that this rep should be paid an OT rate of $17.50 x 1.5 = $26.25/hr.
We have already paid them for 10 hrs @ $15.00/hr.  So, theoretically, we still owe them 10 hrs @ $11.25/hr.
 
  • OVERTIME RATE:            $26.25/hr - $15.00/hr = $11.25/hr
  • OVERTIME PAY:               10 hrs @ $11.25/hr  = $112.50
  • TOTAL CA PAY:                $750 + $100 + $112.50 = $962.50
 
In all other states, the calculation would work like this:
 
  • REGULAR PAY:                50 hrs @ $15.00/hr = $750.00
  • BONUS PAY:                     1 @ $100 = $100.00
  • AVG RATE OF PAY:         $850.00 / 50.00 = $17.00/hr
 
 
So, at this point, we can calculate that this rep should be paid an OT rate of $17.00 x 1.5 = $25.50/hr.
We have already paid them for 10 hrs @ $15.00/hr.  So, theoretically, we still owe them 10 hrs @ $10.50/hr.
 
  • OVERTIME RATE:            $25.50/hr - $15.00/hr = $10.50/hr
  • OVERTIME PAY:               10 hrs @ $10.50/hr  = $105.00
  • TOTAL CA PAY:                $750 + $100 + $105.00 = $955.00