FLSA Rates for Monthly and Semimonthly Exception Hourly Employees
This topic discusses monthly exception hourly FLSA calculation, and provides an example.
Exception hourly employees that are paid semi-monthly or monthly must be set up with the Compensation Rate, Frequency of semi-monthly or monthly. For monthly or semimonthly pay periods, the COBOL uses the annualized allocation of standard hours and rate for regular earnings. The annualized allocation of standard hours and rate for regular earnings on the paysheet does not reflect the actual hours worked and rate paid for exception hourly employees. The system therefore calculates:
Total hours worked in pay period = work days in pay period × work day hours from Job Data.
Pay period average rate = pay period earnings / total hours worked.
The FLSA regular earnings = pay period average rate × actual hours worked.
The calculated FLSA regular earnings is the one used in FLSA rate calculation instead of the regular earnings from paycheck.
This topic provides an example of monthly exception hourly FLSA calculation.
Note: For weekly and biweekly pay periods the calculation is the same as the example for hourly employees.
This example shows the calculation method when the FLSA period crosses two months.
Period Definitions
This example relates to the following periods:
|
Period |
Begin – End Dates |
|---|---|
|
Pay period (June) |
June 1 to June 30 |
|
Pay period (July) |
July 1 to July 31 |
|
Earnings period (June end) |
June 28 to June 30 |
|
Earnings period (July begin) |
July 1 to July 4 |
|
FLSA period |
June 28 to July 4 |
Annualized Contractual Allocation
This table shows Mark's annualized allocation of standard hours and rate for regular earnings:
|
Description |
Value |
Calculation Formula |
|---|---|---|
|
Hours per month |
173.33 |
((40 standard hours per week × 52 weeks per year) / 12 months) |
|
Regular earnings per month |
2,291.67 USD |
|
|
Hourly rate |
13.221154 USD |
(2,291.67 USD earnings per month / 173.33 hours per month) |
Regular Paycheck Earnings by Earnings Period
|
Earnings Period |
Rate Code |
Hours |
Rate |
Earnings |
Overtime Hours |
|---|---|---|---|---|---|
|
June 28 to June 30 |
TRG (regular) |
16.00 |
13.221154 |
211.54 |
5 |
|
July 1 to July 4 |
TRG (regular) |
13.33 |
13.221154 |
176.24 |
4 |
Additional Information on FLSA Pay Data
On Mark's FLSA Pay Data page the following information appears in the Additional Information group box for the Pay Period Average Reg Earns calculation:
|
Earnings Period |
FLSA Hours |
Rate |
FLSA Earns |
Days in Period |
Work Day Hours |
Pay Period Earn |
|---|---|---|---|---|---|---|
|
June 28 to June 30 |
16.00 |
13.020852 |
208.33 |
22 |
8.00 |
2291.67 |
|
July 1 to July 4 |
24.00 |
12.454728 |
298.91 |
23 |
8.00 |
2291.67 |
In the earnings period July 1 to July 4, 13.33 hours are posted for regular earnings. However, from July 1 to July 4, Mark actually worked three eight-hour days, bringing the total FLSA hours worked to 24, instead of the 13.33 hours posted for regular. This illustrates how the annualized allocation of hours doesn't match the actual hours worked.
FLSA Regular Earnings Calculation
Using the FLSA data as shown in the Additional Information group box, the system computes the FLSA regular earnings using pay period average rate as follows:
|
Calculation |
Formula |
June |
July |
|---|---|---|---|
|
Total hours worked in the pay period |
work days in pay period × work day hours |
22 × 8 = 176 |
23 × 8 = 184 |
|
Pay period average rate |
pay period earnings / total hours worked |
2291.67 / 176 = 13.020852 |
2291.67 / 184 = 12.454728 |
|
FLSA regular earnings |
FLSA hours worked × pay period average rate |
16 × 13.020852 = 208.33 USD |
24 × 12.454728 = 298.91 USD |
FLSA Rate Calculation
After calculating the pay period average regular earnings, the rest of the FLSA processing remains the same. The system uses the FLSA regular earnings amounts to calculate the FLSA rate as follows:
|
Earnings Code |
Hours |
Straight-Time Rate |
Straight-Time Earnings |
|---|---|---|---|
|
TRG June 28 to June 30 |
16.00 |
13.020739 (pay period average rate) |
208.33 USD |
|
TRG July 1 to July 4 |
24.00 |
12.454565 (pay period average rate) |
298.91 USD |
|
TOV |
9.00 |
13.221154 (annualized contractual hourly rate) |
118.99 USD |
|
TPB |
|
100.00 USD |
|
|
Totals |
49 |
726.23 USD |
In this case, on the earnings end date of July 4, the total FLSA hours are over 40, so the system processes as follows:
Divides the total earnings by the total hours to compute the new FLSA rate.
726.23 USD / 49 = 14.821020.
Applies the new FLSA rate to the current overtime of four hours, giving overtime premium of 29.64 USD (14.821020 USD × .5 × 4 hours).
Total overtime pay is 82.52 USD ((4 hours × 13.221154 USD contractual rate) + 29.64 USD FLSA overtime premium).
Creates a new pay line for the previous period overtime of five hours and applies the new FLSA rate.
5 × 14.821020 = 103.16.
FLSA overtime premium is 37.05 USD (14.821020 USD × .5 × 5 hours) and total overtime pay is 103.16 USD ((5 hours × 13.221154 USD contractual rate) + 37.05 USD FLSA overtime premium).
Reverses the original overtime paid in the previous period at the contractual rate of 13.221154.
The reversal amount is 99.16 USD (13.221154 USD × 1.5 × 5 hours).