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How To: Manage Overtime
1. BackgroundOvertime policies vary greatly across companies and regions. The Logger's Edge accommodates a wide number of rules that can be applied to calculate overtime pay.
2. Steps Involved
Set ting up your basic overtime rules
In the System Configuration Window, there are a set of options that determine your basic overtime rules:
The left part of the screen determines when overtime is tripped. You can specify the hours per day, hours per week or hours per month to determine when overtime hours are tripped. An entry of zero (0) means that your don't want to apply a rule. Thus, in the screen shown above, only a daily rule (of eight hours) is imposed. You can use the daily, weekly, or monthly rules individually. You can use a daily rule with a weekly rule or a daily rule with a monthly rule. You cannot use a weekly rule combined with a monthly rule.
For example, in the screen the entry of 8 in the Hours/Day means that overtime will be tripped when hours worked in a day exceed 8. Similarly a value of 10 would mean that overtime would be calculated when the hours worked exceeds 10.
You can use the daily value in conjunction with the weekly or monthly values. For example, if you added a value of 40 in the Hours/Week entry (with the 8 Hours/Day entry), this would be interpreted as: overtime is calculated for any hours worked that exceed 8 in a single day or 40 in a week.
Example 1. A guy works one shift of 10 hours and 36 hours in the week. He gets paid for 2 hours of overtime based on the 8 Hours/Day rule.
Example 2. A guy works five shifts of 8 hours and one shift of 4 hours, for a weekly total of 44 hours. He gets paid 4 hours of overtime based on the 40 hour rule.
Example 3. A guy works four shifts of 9 hours and one shift of 6 hours for a weekly total 42 hours. In this case, he would earn 4 hours hours of overtime based on the 8 Hours/Day rule or 2 hours based on the 40 Hours/Week rule. In The Logger's Edge, the overtime calculation uses the greater of the two overtime values -- the guy would earn 4 hours in this example.
The daily overtime rule can also be combined with the monthly rule. (Note the weekly and monthly rules cannot be used together.) In Alberta, forestry companies often apply an overtime rule of 191 hours per month or 10 hours per day. Thus, an employee would be paid overtime for any hours in excess of 10 in any single day or 191 for the month. Like the weekly rule, if the two different rules yield differing overtime calculations will The Logger's Edge will use the greater of the two overtime values.
Example 4. A guy works 16 shifts of 10 hours and four shifts of 11 hours for a monthly total 204 hours. In this case, he would earn 4 hours hours of overtime based on the 10 Hours/Day rule or 13 hours based on the 191 Hours/Month rule. In The Logger's Edge, the overtime calculation uses the greater of the two overtime values -- the guy would earn 13 hours of overtime in this example.
The Logger's Edge orders every time slip in chronological order and applies the overtime rules when the running total of hours exceeds the overtime limit.
Example 5. Assume we have a 40 Hr/Week limit and no daily limit. If a worker submits 5 time sheets for a week (Monday thru Friday) with 9 hours on each, overtime would start on the 41st hour of the week for the employee -- meaning the 5th hour on Friday. Hours 5 thru 9 on Friday would have overtime applied.
Example 6. Same facts as Example 5, but assume we have a daily overtime limit of 8 Hours/Day. In this case, the 9th hour on each day would be counted as an overtime hour. There would be no overtime based on the weekly limit.
Example 7. Same facts as Example 6. Now assume the guy works Saturday for 4 hours. In this case, he would have earned 5 overtime hours for his work on Monday through Friday and have earned 40 hours of straight time. Thus, his 4 hours on Saturday would all qualify as overtime (based on the weekly rule), yielding a total of 9 overtime hours for the week. Note that the actual overtime hours are not the last 9 hours for the week, but are the last hour of each weekday and the four hours on Saturday. This distinction is important if the employee is paid different base pay rates for different hours.
In the The Logger's Edge employees can have more than one time slip in a day. For example, a guy might have a slip of 7 hours for skidding, 2 hours of loading and 1 hour of service, for a total of 10 hours. Again, The Logger's Edge processes these slips in chronological order to determine which hours are the overtime hours. For example, under an 8 Hours/Day rule, the employee would earn 2 hours of overtime, but which 2 hours? Again, this distinction is important if the employee is paid different base pay rates for different hours. How does The Logger's Edge determine chronological order when multiple slips are submitted in the same day? On the time slip, there is an entry called 'Order':
This entry determines the chronological ordering of multiple slips in a day (0 is first, 1 is second, 2 is third, as so on). In general, you should order your slips in the sequential order in which the work is performed.
If
you have multiple activities on your time slip, such as show below:
the ordering is based on the sequence assigned to each activity. The main activity is processed first and the additional activities are processed in order of their numerical assignment in the pay activities table:
The entries in the column for 'Time Sheet Activity #' determine the chronological ordering of hours for calculating overtime.
The
ordering of the entries on the time slip form can be different from the
ordering of the 'Time Sheet Activity #' in the pay activities table.
Do not be mislead. The ordering of the 'Time Sheet Activity #' in the
pay activities table is what governs the chronological ordering.
Example 8. Assume an 8 Hours/Day overtime rule. Based on the entries in the two screen snippets above, the ordering of the hours would be: first 6 hours for Logging, next 1 hour for Service; next 1 hour for repair; and last 2 hours for Delay (Delay is last because it is last in the ordering in the pay activities table). These last 2 hours would be paid overtime in The Logger's Edge.
What is a week?
A week is what you want it to be. In there is a setup item under Setup | Accounting | Weeks from the Main Menu:
In this screen you set the start date for each week. This grid allows you to start your weeks on any day of the week you want. Note that you need to only enter the start date for a week. The end date is assumed by The Logger's Edge to be the start date (less a day) of the next week. Thus, for example, in the screen above Wk 11 2005 starts on 3/13/2005 and ends on 3/19/2005 (the start date of the next week, less a day).
As
you can see a week can start on any day....and doesn't even have to be 7
days.
Setting up Weeks Automatically
Clearly, setting up all 52 weeks in a year can be a pain. There is, however, a way to automatically set up weeks in The Logger's Edge. Before the start of a year, you can go to the system configuration screen and populate your weeks:
In this frame, you enter the first day of your first week for the year. For example, January 7th is the first Sunday in 2007. So, if your weeks all start on Sunday, you would enter January 7th 2007 and click on 'Populate'. This function will create all your weeks for 2007 in one fell swoop.
I your weeks start on Saturday, you would enter January 6th; if your weeks start on Monday, you would enter January 1st (this date is the first Monday in January.
The
weekly overtime rules will NOT work
properly if you do not set your weeks up ahead of time. You should
make this event a regular end-oft-he-year activity. You can always use
the populate weeks functionality to set up more than one year at a time.
You just need to enter the start date for the first week of each year and
click Populate.
What is a month?
A month is defined simply a calendar month. You do not need to set up months like you must do with weeks.
In
the Alberta system of 191 hours per month, you are legally allowed to start
your months on a day of the month, as long as it is the same day every
month. The Logger's
Edge does not currently support this provision.
If you do not want to use a calendar month, you can trick the system by using the 'Weeks' functionality to set up weeks as months:
For example, in the screen above, 'weeks' are defined as months, starting on the 3rd of each month. You would then enter the 191 hour limit as weekly limit and leave the monthly limit zero (0).
What If I Just Want to Enter My Overtime Manually?
Note
the 'Enter Overtime Manually' checkbox on the
bottom left of the form. When checked, this option will turn off all
automatic calculation of overtime hours.
If you fund that The Logger's Edge overtime options do not accommodate your company's overtime policies, you can check this box and the overtime rules will switched off. You can then enter the hours that you want classified as overtime manually.
In order to enter overtime hours into The Logger's Edge you would then specify the overtime hours on an employee's time slip:
In the screen snippet above, we have a time slip entry that reads 10 hours of work (for logging). Of these hours, 2 count as overtime hours. Do not be confused: the total hour count for the day is 10 hours: 8 hours of straight time and 2 hours of overtime.
If you want to manually enter overtime, you would just make your entries on each time slip to which overtime applied and leave it zero (0) if there were no overtime on a given shift.
The
'Overtime Hours' entry box is not ordinarily enabled and must be configured
by a system administrator.
Who is Qualified for Overtime?
Every employee is qualified for overtime.
If you want to exclude one (or some) employees from overtime, you must mark them as exempt from overtime. How is this done? In the employees grid there is a checkbox 'Apply OT Rules' (not normally enabled) that can be used to designate which employees have overtime applied and which do not. By default, all employees are eligible for overtime.
You can use the 'Apply OT Rules' checkbox to exclude an employee from overtime by un-checking his or her checkbox. For example, in the screen above, Jake Barr is not eligible for overtime.
The
'Apply OT Rules' checkbox is not ordinarily enabled and must be configured
by a system administrator.
What Hours are Qualified for Overtime?
Not all hours are treated equally. In The Logger's Edge you can determine which hours are subject to overtime and which are not. For example, many companies exclude 'travel' hours from the overtime calculation, even though they pay part (or all) of an employee's travel time.
This determination is made through a three-step process.
(1) The Logger's Edge first determines for what activity the hours are worked, e.g. Logging, Skidding, Maintenance, Down, Travel:
In the example above the time entry is for 9.5 hours of Logging.
(2) Next, The Logger's Edge determines what is the primary type of activity. In the Pay Activities grid, each specific activity has a type (that you assign).
In the grid, we see that each activity has a type like 'Reg Prod' or 'Eq_Maint' or 'Non-Prod Charge' or 'Travel'. These types determine whether or not hours on a time slip qualify for overtime. In our example, we see that 'LOGGING' is of pay type 'REG PROD' -- this will determine if it qualifies for overtime. Also note in the grid that activity 'TRVL' is of type 'TRAVEL'
(3) Finally, The Logger's Edge checks the overtime status of the Pay Type:
This grid is available under Setup | Pay Activity Types from the main menu. In this grid you see all the basic types of activities (which you cannot change) that each have a checkbox indicating whether or not overtime applies. For example, we see that 'REG PROD' is tagged as having overtime apply, but that 'TRAVEL' does not (the indicator is unchecked).
Thus, reverting to the beginning of the example, 'Logging' would count as an overtime activity. By setting up your activities, and assigning them an appropriate type, you can control which hours will be covered by overtime and which will not.
Can I Override the Program and Force Certain Hours to be Overtime?
In certain situations you may want to override the The Logger's Edge calculation of overtime and force certain hours to be overtime hours.
For example, suppose you have trucking employees that are normally paid by the loads they deliver and you do not keep time slips for them. But, periodically the truck drivers don't haul logs, but transport machines instead (e.g. driving a low-bed). And, let's say you want to pay them overtime because they've already made up their 40 hours (or whatever your overtime rule is) by hauling logs. In The Logger's Edge you can specifically identify a time slip as 'overtime', regardless of your over time rules.
There is a checkbox 'Force to Overtime' in that can be used in The Logger's Edge to force a time slip to be for overtime. In the snippet above, you can see that the 6.5 hours of Low Bedding has be checked as being forced to overtime. This means that no matter how many other hours the employee works, the 6.5 hours will be accorded overtime status and be paid accordingly.
The
'Force to Overtime' checkbox is not ordinarily enabled and must be configured
by a system administrator.
Can I Override the Program and Exempt Certain Hours to be Overtime?
In certain situations you may want to override the The Logger's Edge calculation of overtime and exempt certain hours from overtime.
For example, suppose you have an employee who asks to work extra shifts so that he can be paid when he takes a vacation in the future. Because the request is made on the part of the employee, you may not want to pay him overtime for those extra shift(s) in this circumstance.
There is a checkbox 'No Overtime' in that can be used in The Logger's Edge to exempt a time slip that would otherwise qualify for overtime to be excluded from the overtime calculation. In the snippet above, you can see that the 8 hours of Yarding has be checked as being exempted from overtime. This means that no matter how many other hours the employee works, the 8 hours will be not be paid as overtime.
The
'No Overtime' checkbox is not ordinarily enabled and must be configured
by a system administrator.
What Rate Does an Employee Get Paid for Overtime?
In the system configuration window, you determine the rate at which overtime hours are paid. The rate is entered as a multiple of the otherwise payable rate.
In the screen above a factor of 1.5 has been entered. This means that if an employee's time would otherwise be compensated at $20/Hr, he will be paid $30/Hr (20 x 1.5) for overtime hours. Use the factor of 1.5 to represent 'time-and-a-half'; use the factor 2.0 for 'double-time'. The factor will be applied to the rate at which the specific overtime hours would otherwise be paid. Thus, if an employee has a rate of $20/Hr for one activity, but gets paid $22/Hr for another activity, he will be paid at 1.5 times the rate that applies to the actual overtime hours.
The
entry of 1000 if arbitrary and can be set to any large number. It is
used to indicate that all remaining hours fall under the fact for that row
-- basically indicating that time-and-a-half is the only rate that applies
to overtime.
Example 9. Assume an 8 Hour/Day overtime limit. Suppose an employee works for 6 Hours for skidding at a regular rate of $20/Hr and works 4 Hours of hand falling at a regular rate of $22/Hr. How much is he paid for the day? Well, it depends which hours were performed first (See the section above When does overtime kick in?). If the skidding was performed first, he would be paid his regular rate for his skidding hours (= $120 = $20 x 6 Hrs) and two hours of straight time for hand falling (= $44 = $22 x 2 Hrs) and two hours of overtime for hand falling (= $66 = $22 x 1.5 x 2 Hrs), for a total of $230.00. Conversely, if the hand falling was performed first, he would be paid his regular rate for his hand falling hours (= $88 = $22 x 4 Hrs) and four hours of straight time for skidding (= $80 = $20 x 4 Hrs) and two hours of overtime for skidding (= $60 = $20 x 1.5 x 2 Hrs), for a total of $228.00.
You can also set up a second threshold to pay overtime:
In the Overtime Pay frame above, the settings will pay time-and-a-half for the first 2 overtime hours and then bump up to double-time for hours over 2. (Again, the entry of 1000 if arbitrary and can be set to any large number. It is used to indicate that all remaining hours fall under the fact for that row.)
Example 10. Assume an 8 Hour/Day overtime limit. Suppose an employee works for 7 Hours for skidding at a regular rate of $20/Hr and works 4 Hours of hand falling at a regular rate of $22/Hr and performs one hour of service (regular rate $20/Hr), for a total of 12 hours in the day. How much is he paid for the day? Well, it depends which hours were performed first (See the section above When does overtime kick in?). If the skidding was performed first, he would be paid his regular rate for his skidding hours (= $140 = $20 x 7 Hrs). If the hand falling were performed next, he would be paid for one (1) hour of straight time for hand falling (= $22 = $22 x 1 Hr) and two hours of overtime (time-and-a-half) for hand falling (= $66 = $22 x 1.5 x 2 Hrs), and one (1) hour of double-time for hand-falling (= $44 = $22 x 2 x 1 Hr). The service time (performed last) would be paid at double-time (= $40 = $20 x 2 x 1 Hr). His total pay for the day would be $312 (= $140 + $22 + $66 + $44 + 40).
A Tangent on Costing
For job or block costing, you have the option to use the direct payroll cost of the employee or his/her loaded payroll rate.
For the direct payroll cost option, The Logger's Edge uses your actual payroll expense (paid to the employee) as the cost. Thus, it takes into account all overtime payments and counts those payments as a direct cost. Therefore your costing takes full account of overtime paid to complete a job or block.
For the loaded payroll cost option, the cost of the employee is calculated using his/her loaded payroll rate:
For example, in the grid above, AJACKSON's straight time rate is 23.00/Hr and his loaded rate is $27.00/Hr. His direct payroll cost would be calculated based on the $23.00 plus any overtime that was paid over and above that rate.
AJACKSON's loaded rate is 27.00/Hr and this rate is used for reports when the loaded payroll cost option is selected. But what is AJACKSON's loaded rate when overtime is paid?
The overtime loaded rate is equal to the overtime pay rate (= $30 = $20 x 1.5 in this example) plus the difference between the loaded rate and the regular pay rate (= $6 = $26 - $20) for a total loaded rate of $36/Hr in this example. The Logger's Edge assumes that the difference between the loaded rate and the regular pay rate is the amount of the 'load' on an hourly basis. Thus the load is constant and directly proportional to the hours worked and not his gross pay.
An
alternative way to calculate the overtime loaded rate would be to apply the
overtime factor to the loaded rate (e.g. $26 x 1.5 = $39/Hr). This
approach is not used in the The Logger's
Edge. Admittedly, there is no perfect answer to this
situation. In The Logger's
Edge we have made the assumption that your employee added
load is more accurately reflected based on the number of hours he works
rather than his or her gross pay.
The employee hourly pay report (under Reports | Hourly | Employees on the Main Menu) provides a good means to check the overtime calculations. The report below is based on an overtime regime that call s for overtime to be paid for hours in excess of 8 in any single day and/or over 40 in the week.
Note that in the first week, the employee worked a total of 52.5 hours, but is paid for 16 hours of overtime because the daily limit yields a greater overtime amount (the overtime would only be 12.5 under the simple 40 Hr/week rule). In the second week, the employee earns 24.5 hours of overtime, which is a combination of 16.5 hours due to the daily limit and 8 (on 1/14/2006) based on the weekly limit.
How Does Overtime Interact with Holiday Pay?
The interaction between the overtime rules and the holiday pay rules is somewhat complicated. In order to refresh yourself on how holidays are treated you should see: How to: Pay for Holidays.
In order to see how the interaction works, let's use the example in the report above. In the week of 01/01/2006 to 01/07/2006, the employee 'Don Mincher' worked 52.5 hours and was paid for 16.5 hours of overtime.
Now, suppose we want to pay Don for January 1st as a Holiday. There are several cases to consider:
Case 1: Don does not work the Holiday.
In this case you can add a time slip for Don that has 8 hours (or however many you want) for the 1st and for the Activity 'Holiday'. The Holiday slip will be processed like any other slip and Don will be paid his base pay rate of $18/Hr for the Holiday time.
In the report, we see the additional 8 hours in the first row for the Holiday.
In this case the 8 Holiday hours are counted as straight-time hours and do not count against the 40 hour weekly overtime limit. Thus, Don's straight time is 44.5 hours for the week -- 8 hours more than previously. His overtime hours (16 hours) have not changed.
The reason for this is that the 'Holiday' activity is of the pay type 'Non Work.'
And, the pay type 'Non Work' does not qualify for overtime. See Below:
The 'Apply to Overtime' flag is not checked for the Type 'Non Work' -- this means hours tagged as Holiday will not count towards the overtime limit.
You can change this.
Let's now assume do you want Holidays to count against the overtime limit. You can check the 'Apply to Overtime' flag for the Type 'Non Work' or change the pay type for Holiday to a type that has the 'Apply to Overtime flag checked, such as 'Non-Prod Charge'.
If you check 'Apply to Overtime' flag for the Type 'Non Work' -- Holidays will not count towards the overtime limit. In this case, Don's pay statement would look as such:
In this case the 8 Holiday hours are counted as straight-time hours and count against the 40 hour weekly overtime limit. Thus, Don's straight time is 40 hours for the week -- 3.5 hours more than previously. The 3.5 hours are paid straight time because Don has 36.5 straight time hours without the Holiday and the extra 3.5 hours fill in the gap between 36.5 and the 40 hour overtime limit. Note that the actual Holiday entry is not split because it is chronologically at the start of the week. The last entry for the week (on January 6th) is the one that switches from straight-time to overtime. In this case, Don's overtime hours (20.5 hours) have increased by 4.5 hours.
There is just one more factor to consider and that is the rate that the
Holiday activity is to be paid. In the reports above, the pay rate
shown is Don's base pay rate. This is because the Holiday factor in
the Pay Types grid is set to 1.0 -- meaning that time recorded on a Holiday
earns a multiple of 1.00 and no holiday premium is paid.
The 'Holiday Factor' is used to multiply the employee pay rate by the number of hours recorded for a holiday. (Holidays themselves are determined by your entries under Setup | Holidays from the main menu.
Case 2: Don Works the Holiday.
Now let's assume that Don actually works a 9 hour shift on January 1st. There are two basic ways to handle this time.
A. Treat the holiday hours and work hours as two separate entries, whereby the employee is paid for a standard shift at straight time for the holiday and is also paid for the hours worked, presumably at a premium (time-and-a-half) rate. In this case you would make two time entries for the holiday.
B. Make one time entry for the work hours, but make the premium (say double-time-and-a-half) a higher rate to reflect work on a holiday. In this case the employee would not be paid for a holiday if he did not actually work the holiday.
Alternative A: Add an Additional Time Entry.
Under this alternative, you would enter an additional (in addition to the Holiday slip for 8 hours) time slip for the time actually worked:
In the slip above, Don has an entry for 9 hours of Process/Buck on January 1st. He detailed pay for January 1st appears as such:
Don is paid 8 hours for the Holiday (straight-time) and 9 hours for working (Process/Buck).
The pay rate for the Holiday entry is Don's base rate ($18/Hr) -- this rate is determined by the Holiday factor equal to 1.00 for the Pay Type 'Non Work Paid Time'.
The rate for 'Process/Buck' is $27.00 which equals the base rate of $18.00 multiplies by 1.5 -- the Holiday factor for 'Reg Prod'. Thus, Don's pay for the day is $387.00 (= $18 x 8 Hrs + $27 x 9 Hrs).
Don's pay statement is shown below:
In this statement, Don's straight time hours are 53.5 and overtime hours are 16.0. The two entries for for January 1st count as straight time and do not affect Don's overtime hours. Don's overtime hours are unchanged from the original number.
Why is this?
First, the 8-hour Holiday entry does not count toward overtime, as indicated for the 'Apply to Overtime' checkbox (unchecked) for the 'Non Work Paid Time' pay type. As noted above, if this checkbox were checked instead, the 8 hours would count for overtime.
The treatment of the 'Process/Buck' entry for 9 hours is more complex.
The Logger's Edge has a default programmatic rule that says that if time is paid a premium for a holiday (meaning it has a Holiday factor of greater than 1.0), then do not count that time for overtime calculations. Thus, in our example, the 9.0 hours worked on the Holiday would not be classed as overtime eligible because the holiday factor for 'Process/Buck' (the 'Reg Prod' pay type) is set to greater then 1.00 (1.5 in this case). In this case, Don Mincher's 9 hours for 'Process/Buck' would not be accorded overtime treatment. Even though the 9 hours are paid at a rate of time-and-a-half, it does not count toward overtime.
In sum, neither the 'Holiday' nor the 'Process/Buck' hours count against overtime.
Now
of course, there is a setting that can be used to override
The Logger's
Edge
programmatic rule.
In the System Configuration screen, there is a checkbox ('Holiday Hours Count for Wkly/Mnthly Overtime') to force all Holliday hours to count for overtime, regardless of the Holiday pay factor. (In order to qualify for this treatment, the time must be otherwise eligible for overtime, as indicated by the 'Apply to Overtime' checkbox in the Activity Types grid. Thus, if 'Non Work Paid Time' time does not qualify for overtime, the 'Holiday Hours Count for Wkly/Mnthly Overtime' checkbox has no effect.
Thus, if this checkbox is checked, the 9 hours of 'Process/Buck' will count for overtime, but the 8 hours for 'Holiday' will not. Don's statement now appears as such:
The straight time hours of 48 equals the 40 hours limit plus the 8 hours tagged as Holiday. The 9 hours of 'Process/Buck' now counts for overtime and raises the overtime hours from 16 to 21.5, an increase of 5.5 hours. The other 3.5 hours (of the 9 for 'Process/Buck') are used to fill in the 3.5 hour gap under the 40 Hr/Week overtime limit (the 8 hours tagged as Holiday are ignored).
Alternative B:
Under this alternative, you make only one entry for the holiday reflecting the hours the employee actually works. For example, you might pay an employee for shifts worked on a holiday at double-time-and-a-half for all the hours worked. If a guy works 9 hours, he gets paid double-time-and-a-half for all 9 hours; if he works 6 hours, double-time-and-a-half for the six hours.
First, you enter a time slip for the time actually worked:
In the slip above, Don Mincher has worked 9.00 hours of regular production time (Process/Buck).
You would not enter a time slip for Holiday time under this alternative; just enter the single slip for the employee.
Next, you need to set the Holiday Pay factor to 2.50 in the Pay Types grid:
This setting will multiply the employee's base rate for production time by 2.50 (double-time-and-a-half).
Now, if we run the employee pay calculator and look at the employee statement, we see production time (Process/Buck) paid at $45/Hr (45 = 2.5 x $18/Hr).
Thus, in the statement above, Don Mincher is paid double-time-and-a-half for working his 9 hour shift on a holiday.
The difference between this alternative and Alternative A is that
only time actually worked is paid under Alternative B, whereas under
Alternative A, the employee always gets at least 8 hours at his base
rate. Of course, if the employee works more than 8 hours,
Alternative B pays out at double-time-and-a-half for the hours over 8;
alternative A only pays time-and-a-half for the hours over 8.00.
If the employee works the same number of hours as the holiday entry
(under alternative A), the pay will be the same under either
alternative.
In the statement above, Don has 45.5 hours of straight time and 16.0 hours of overtime. The hours worked on the Holiday do not count for overtime.
As noted above, The Logger's Edge has a default programmatic rule that says that if time is paid a premium for a holiday (meaning it has a Holiday factor of greater than 1.0), then do not count that time for overtime calculations. Thus, in our example, the 9.0 hours worked on the Holiday would not be classed as overtime eligible because the holiday factor for 'Process/Buck' (the 'Reg Prod' pay type) is set to greater then 1.00 (2.5 in this case). In this case, Don Mincher's 9 hours for 'Process/Buck' would not be accorded overtime treatment. Even though the 9 hours are paid at a rate of time-and-a-half, it does not count toward overtime.
There is a setting that can be used to override The Logger's Edge programmatic rule.
In the System Configuration screen, there is a checkbox ('Holiday Hours Count for Wkly/Mnthly Overtime') to force all Holliday hours to count for overtime, regardless of the Holiday pay factor. (In order to qualify for this treatment, the time must be otherwise eligible for overtime, as indicated by the 'Apply to Overtime' checkbox in the Activity Types grid.
In our example, if this checkbox were checked, the 9 hours of 'Process/Buck' will count against the overtime limit. The result would be that Don would then have 40 hours of straight time and 21.50 hours of overtime.
The straight time hours of 40 equals the 40 hours limit. The 9 hours of 'Process/Buck' now counts for overtime and raises the overtime hours from 16 to 21.5, an increase of 5.5 hours. The other 3.5 hours (of the 9 for 'Process/Buck') are used to fill in the 3.5 hour gap under the 40 Hr/Week overtime limit (recall that Don has only 36.5 hours of straight time without the 9 hours for 'Process/Buck').
The implications of this result are that the 9 hours for the holiday are paid a premium (double-time-and-a-half) and count against the 40 Hr/Week limit, thereby reducing the limit to 31 for the rest of the week. Thus, regular hours over 31 will be accorded overtime treatment. In our example, we see the 4.5 hours worked on January 6th are paid overtime. Ultimately, this means that only 31 hours for the week will be paid at the straight time rate.\ and all other hours will be paid at a premium.
