Multiplication Factors in FLSA Calculations
This topic discusses:
Example of contractual overtime with a multiplication factor of 0.5.
Example of contractual overtime with a multiplication factor of 1.5.
Example of contractual overtime with a multiplication factor greater than 1.5.
Note: The information in these tables is summarized on the employee paysheet by earnings codes. The FLSA function does not determine overtime rules. In all of the examples in this topic, the Higher of FLSA/Contractual (higher of Fair Labor Standards Act/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.
When using a multiplication factor of 0.5 for overtime, you must either set up a companion earnings with a multiplication factor of 1.0 to record the straight-time hours, or include the straight-time hours with the regular hours.
This example includes the straight-time hours in a companion earnings:
|
Item |
Description |
|---|---|
|
Employee |
David |
|
Contractual hourly rate |
12.00 USD |
|
Workday |
8 hours |
|
FLSA period |
7 days |
|
Pay period |
Weekly |
Contractual Calculation
|
Earnings Code |
Hours |
Rate |
Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 0.5 |
6.5 |
6.00 USD = 12.00 USD × 0.5 |
39.00 USD |
|
Overtime at 1.0 |
6.5 |
12.00 USD |
78.00 USD |
|
Shift 2 differential |
12 |
3.25 USD |
39.00 USD |
|
Shift 2 overtime at 0.5 |
2 |
7.625 USD = (12.00 USD + 3.25 USD) × 0.5 |
15.25 USD |
|
Shift 2 overtime at 1 |
2 |
15.25 USD = 12.00 USD + 3.25 USD |
30.50 USD |
David's contractual premium pay is 54.25 USD:
12.00 USD × 0.5 × 6.5 overtime hours = 39.00 USD.
15.25 USD × 0.5 × 2.0 shift overtime hours = 15.25 USD.
FLSA Calculation
|
Earnings Code |
Hours |
Straight-Time Rate |
Straight-Time Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 1.0 |
6.5 |
12.00 USD |
78.00 USD |
|
Shift 2 differential |
|
3.25 USD |
39.00 USD |
|
Shift 2 overtime at 1.0 |
2 |
15.25 USD |
30.50 USD |
|
Totals |
48.5 |
|
627.50 USD |
Calculations:
FLSA rate:
12.9381 = 627.50 USD / 48.5 total weekly hours.
Premium pay:
54.98 USD = 12.9381 USD × 0.5 × 8.5 overtime hours.
Because the FLSA overtime premium of 54.98 USD is greater than the contractual premium of 54.25 USD, use the FLSA rate to calculate David's overtime for the week.
This example shows the calculation and comparison of the contractual and FLSA premiums:
|
Item |
Description |
|---|---|
|
Employee |
Laura |
|
Contractual hourly rate |
12.00 USD |
|
Workday |
8 hours |
|
FLSA period |
7 days |
|
Pay period |
Weekly |
Contractual Calculation
|
Earnings Code |
Hours |
Rate |
Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 1.5 |
6.5 |
18.00 USD = 12.00 USD × 1.5 |
117.00 USD |
|
Shift 2 differential |
12 |
3.25 USD |
39.00 USD |
|
Shift 2 overtime at 1.5 |
2 |
22.875 USD = (12.00 USD + 3.25 USD) × 1.5 |
45.75 USD |
Laura's contractual premium pay is 54.25 USD:
12.00 USD × 0.5 × 6.5 overtime hours = 39.00 USD.
15.25 USD × 0.5 × 2.0 shift overtime hours = 15.25 USD.
FLSA Calculation
|
Earnings Code |
Hours |
Straight-Time Rate |
Straight-Time Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 1.0 |
6.5 |
12.00 USD |
78.00 USD |
|
Shift 2 differential |
|
3.25 USD |
39.00 USD |
|
Shift 2 overtime at 1.0 |
2 |
15.25 USD |
30.50 USD |
|
Totals |
48.5 |
|
627.50 USD |
Calculations:
FLSA rate:
12.9381 USD = 627.50 USD / 48.5 total weekly hours.
Premium pay:
54.98 USD = 12.9381 USD × 0.5 × 8.5 overtime hours.
Because the FLSA overtime premium of 54.98 USD is greater than the contractual premium of 54.25 USD, use the FLSA rate to calculate Laura's overtime for the week.
This example shows the calculation and comparison of the contractual and FLSA premiums:
|
Item |
Description |
|---|---|
|
Employee |
Jane |
|
Contractual hourly rate |
12.00 USD |
|
Workday |
8 hours |
|
FLSA period |
7 days |
|
Pay period |
Weekly |
Contractual Calculation
|
Earnings Code |
Hours |
Rate |
Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 1.5 |
3.5 |
18.00 USD = 12.00 USD × 1.5 |
63.00 USD |
|
Overtime at 2.0 |
4.5 |
24.00 USD (= 12.00 USD × 2) |
108.00 USD |
|
Shift 2 differential |
16 |
3.25 USD |
52.00 USD |
|
Shift 2 overtime at 1.5 |
2 |
22.875 USD = (12.00 USD + 3.25 USD) × 1.5 |
45.75 USD |
Jane's contractual premium pay is 90.25 USD:
12.00 USD × 0.5 × 3.5 overtime hours = 21.00 USD.
12.00 USD × 1 × 4.5 overtime hours = 54.00 USD.
15.25 USD × 0.5 × 2.0 shift overtime hours = 15.25 USD.
FLSA Calculation
|
Earnings Code |
Hours |
Straight-Time Rate |
Straight-Time Earnings |
|---|---|---|---|
|
Regular |
40 |
12.00 USD |
480.00 USD |
|
Overtime at 1.0 |
3.5 |
12.00 USD |
42.00 USD |
|
Overtime at 1.0 |
4.5 |
12.00 USD |
54.00 USD |
|
Shift 2 differential |
0 |
3.25 USD |
39.00 USD |
|
Shift 2 overtime at 1.0 |
2 |
15.25 USD |
30.50 USD |
|
Totals |
50 |
|
645.50 USD |
Calculations:
FLSA rate:
12.91 USD = 645.50 USD / 50 total weekly hours.
Premium pay:
12.91 USD × 0.5 × 10 overtime hours = 64.55 USD.
Because the contractual overtime premium of 90.25 USD is greater than the FLSA premium of 64.55 USD, use the contractual rates to calculate Jane's overtime.