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FLSA Overtime

Employees who are covered by the Fair Labor Standards Act (FLSA) are entitled to overtime compensation at the rate of at least 1.5 times their regular pay rate whenever they work over 40 hours in a week. For FLSA overtime, if the employee's pay includes different rates for different jobs, shift differentials, certain bonuses, etc., the regular pay rate of compensation is calculated as a weighted average. Some states have additional requirements.

For employees who earn minimum wage and earn tips, see Overtime for Tipped Employees.

On the detailed pay entry spreadsheet, saving a pay entry record for the designated FLSA overtime earning code will calculate and apply the overtime rate that equals the weighted average rate multiplied by the rate factor from the designated FLSA overtime setup to hours entered for the FLSA overtime earning code.

To read more about the Fair Labor Standards Act and regulations, you can refer to the U.S. Department of Labor's website at <http://www.DOL.gov/>.

Set Up for FLSA Overtime

Here's how to setup for FLSA overtime.

1. Per Eligible Employee:  Have "FLSA Overtime" selected for the employee on the Compensation tab (or Payroll tab).
2. Eligible Earnings:  Confirm that all the eligible earnings have "Accumulate FLSA" selected on the Earnings Codes Table. This control on the Earnings Code allows administrators to define what is and what is not eligible to be included in the weighted average based on their organization's policies and state and federal regulations.
3. FLSA Overtime Earning:  Have one Earning Code marked as the "FLSA OT Record," such as OVERTIME or OTFLSA.

Detailed Pay Entry for FLSA Overtime

Here's how to cause the weighted average to be the employee's hourly rate for the FLSA overtime row of earnings for the Earning code that is marked with "FLSA OT Record" selected on the Earnings Codes Table.

1. Enter the employee's usual compensation and rows for non-overtime worked. Where the overtime earning is defined with a rate factor of 1.5, then reduce the hours in the rows of earnings to correspond with the standard time worked (only if the rate factor is 1.5).
2. On another row, select the FLSA overtime earning, and enter the number of overtime hours.
3. Save. Result: The weighted average determines the hourly rate displayed for the row of overtime.

FLSA OT Record Calculation on Pay Entry