Example of Contractual Overtime with a Multiplication Factor of 0.5
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.