Alternative Overtime Calculations

The following definitions are provided to aid in the discussion of alternative overtime:

Here are some general principles of alternative overtime calculations and processing:

• For those employees identified as subject to alternative overtime calculation, the system calculates overtime on the alternative basis rather than the usual FLSA method.

• To calculate alternative overtime, the system uses the multiplication factor specified for the overtime earnings code on the Earnings table instead of the fixed 0.5 used in federal FLSA calculation.

• The alternative overtime method follows the FLSA rule setting on the Company table, either always paying the alternative overtime rate or paying the higher of the alternative overtime rate or the contractual rate.

  Note: Salaried employees with unspecified hours are always calculated at the Alternative Overtime rate, even if it is lower than the contractual rate.

• FLSA eligible hours for salaried employees differs depending upon the option selected for FLSA Salaried Hours Used:

  • Unspecified Salaried Hours: The alternative rate is calculated using the total FLSA-eligible hours worked in the week.

  • Fixed Salaried Hours. The alternative rate is calculated using the weekly standard hours in job data.

The system calculates alternative overtime as follows for hourly or exception-hourly employees:

1. Calculates the alternative rate as (regular period pay + overtime pay at contractual + total other FLSA eligible earnings) / total FLSA eligible hours.

2. Continues processing based on the FLSA Rule setting on the Company table:

   • If the FLSA rule is Always Use FLSA Premium, the system uses the calculated alternative rate to calculate the overtime premium by multiplying the alternative rate by the multiplication factor on the Earnings table minus the straight time factor. (For example, for multiplication factor 1.5 it uses .5, for 2.0 it uses 1.0.).

   • If the FLSA rule is Higher of FLSA /Contractual, the system compares the calculated alternative rate to the contractual hourly rate in job data.

     If the alternative rate is equal to or less than the contractual hourly rate, it uses the contractual hourly rate to calculate the overtime premium by multiplying the rate by the multiplication factor on the Earnings table.

     If the alternative rate is greater than the contractual hourly rate, it uses the alternative rate to calculate the overtime premium by multiplying the alternative rate by the multiplication factor on the Earnings table minus the straight time factor. (For example, for multiplication factor 1.5 it uses .5, for 2.0 it uses 1.0.)

3. Adds the calculated overtime premium to the overtime straight time amount to derive the total overtime amount.

For salaried employees for whom the salaried hours option is Unspecified Salaried Hours, the system calculates alternative overtime as follows:

1. Calculates the alternative rate as (regular period pay + overtime pay at contractual + total other FLSA eligible earnings) / total FLSA eligible hours.

2. Calculates the overtime premium by multiplying the job hourly rate by the multiplication factor on the Earnings table.

3. Adds the calculated overtime premium to the overtime straight time amount to derive the total overtime amount.

For salaried employees for whom the salaried hours option is Fixed Salaried Hours, the system calculates alternative overtime as follows:

1. Calculates the alternative rate as (regular period pay + total other FLSA eligible earnings) / weekly standard hours.

2. Compares this alternative rate to the hourly rate on job.

   • If the alternative rate is equal to or less than the hourly rate, uses job hourly rate to calculate the overtime premium.

   • If the alternative rate is greater than the hourly rate, uses the alternative rate to calculate the overtime premium.

This table displays the pay data for an hourly employee: