Overtime Rule Sets

Calculating overtime correctly can be difficult due to the regulations that are imposed by federal, state, and union organizations. For example, overtime regulations for California require that a company pay nonexempt employees one-and-a-half times their hourly rate for any time that they worked over eight hours each day (or 40 hours each week). The regulations also specify that companies must pay nonexempt employees twice their hourly rate for any time worked over 12 hours each day, and over eight hours on the seventh day of work in a week.

To ensure that the organization pays employees according to regulations, you can create overtime rules and overtime rule sets to automate overtime calculations. You use overtime rules to specify how to calculate overtime pay. You can create overtime rules and store them in overtime rule sets. Overtime rule sets can consist of a single rule or multiple rules.

You can create an ordered set of overtime rules to calculate overtime for a specific employee. Overtime rule sets enable you to define and maintain the overtime rules that are required to comply with overtime regulations. For example, to comply with California overtime regulations, you might create a rule set called California Overtime Rule Set, which would consist of these overtime rules:

• Calculate pay at one-and-a-half times the regular rate when an employee works more than eight hours in a day.

• Calculate pay at one-and-a-half times the regular rate when an employee works more than 40 hours in a week.

• Calculate pay at twice the regular rate when an employee works more than 12 hours in a day.

• Calculate pay at twice the regular rate when an employee works more than eight hours on the seventh day of the week.

Because the system processes the overtime rules within a set in the sequence that you specify, the sequence of the rules is important. Processing the rules out of sequence might produce results that do not match overtime requirements.

Using overtime rules, you can automate the process of calculating more complex overtime rules. For example, some organizations calculate overtime using the Chinese Overtime method, in which an employee's overtime rate decreases with each hour of overtime that is worked. The organization might require complex calculations to satisfy overtime requirements that are mandated by labor contracts.

After you create overtime rules and define an overtime rule set, you apply the rule set to an employee group. When you process the rule set, the system changes current, unprocessed timecards and, if necessary, creates new timecards to ensure that employees are paid correctly for any overtime hours that they work.

Note: You cannot use the overtime rule set feature to change historical timecards. Additionally, the regulatory examples in this section are for illustrative purposes only. You should refer to the federal, state, and union labor organizations for accurate and current information about overtime pay regulations.

You can create these overtime rules and attach them to overtime rule sets:

Overtime Rule Set	Description
Timecard Change Rules	Timecard change rules use if/then logic to change original timecards, but they do not create new timecards. For example, you can identify timecards that include regular time on a designated company holiday, and then change the pay type from regular pay to overtime pay. In this scenario, the system changes the pay type on the original timecards.
Timecard Accumulator Rules	Timecard accumulator rules enable you to calculate overtime pay based on a specified limit and time period, and create additional timecards for the overtime pay. When you use timecard accumulator rules, you must use employee groups to identify eligible employees. The accumulator rule then calculates the overtime pay, changes the original timecards to remove the original overtime amounts, and creates new timecards for the overtime pay. For example, you can create an overtime rule to pay employees one-and-a-half times their regular rate for any hours worked in excess of 40 in a week. Thus, if an employee timecard includes 45 hours of regular time in a given week, the system would change the existing timecard to include 40 hours of regular time, and create a new timecard (or timecards) that would include five hours of overtime.
Call Custom Rules	Use call custom rules to call a user-defined business function. If a company has special overtime requirements that cannot be accommodated using change or accumulator rules, you can create a custom function and call the function in the custom rule. For example, if you want to pay a meal allowance of 8.00 USD per day for all employees who work over nine-and-a-half hours, you can create a call custom rule to perform this calculation.
Call Rule Set Rules	Use call rule set rules to call overtime rule sets that you have previously defined. Call rule set rules enable you to reuse rule sets in multiple ways and eliminate the need to re-create rule sets that you use frequently.