FLSA Rates for Hourly and Exception Hourly Employees

The examples in this topic compare premium amounts, rather than rates. The premium is the amount over the regular rate that an employee earns by working overtime. The system adds this to the contractual rate for the overtime hours that an employee works.

If an hourly employee has only regular earnings, the FLSA regular rate is the same as the contractual hourly rate (that is, the rate at which you contracted to pay the employee for a job). If the employee has other included earnings (such as bonuses, shift differentials, multiple pay rates in the same FLSA period, or overtime), the system calculates the FLSA regular rate as shown in the examples in this topic, with the exception of overtime pay for workweeks with fewer than 40 hours.

The information in these tables is summarized on the employee paysheet by earnings codes. The FLSA function does not determine overtime rules. In this example, the Higher of FLSA/Contractual option is selected in the FLSA Rule group box on the FICA/Tax Details page that is accessed from the Company - Default Settings page.

This is the general FLSA formula that also applies to exception hourly weekly and biweekly employees:

• FLSA rate = (regular period pay + overtime pay at contractual + total other FLSA eligible earnings) / total FLSA eligible hours

• FLSA overtime premium = overtime hours × .5 × FLSA rate