Configure Overtime Rate Elements for the US

The payroll process doesn't calculate overtime hours. It calculates only the overtime rate. For it to do this, you need to define elements that calculate your standard and premium overtime pay.

The element configuration involves these steps.

What you need to do	How you do it
Define a standard overtime element	This element pays the base rate of any overtime hours.
Define a premium overtime element	This element pays the premium rate of any overtime hours. The default premium multiple is 50%.
Configure the premium overtime multiple	Once you have created the premium overtime element, you can modify its multiple factor.
Create element eligibility for the overtime premium adjustment element	This indirect element is created when you create the premium overtime element.
Configure existing elements for overtime calculation	Rather than create elements, you can use existing ones, so long as they meet the requirements.

For further info, see the following sections.

Define a Standard Overtime Element

This element captures the regular rate for overtime hours for your nonexempt employees. It isn't impacted by the person's overtime status.

Caution: When you create an overtime element, don't use "Overtime" for the element name or reporting name. "Overtime" is a reserved term, and including it in user-defined elements interferes with balance initializations.

For example, if you wanted to define an overtime element that uses the Hours * Rate calculation rule, you could configure it this way.

Field name	What you enter
Primary Classification	Standard Earnings
Secondary Classification	Overtime
At which employment level should this element be attached?	Assignment Level
Does this element recur each payroll period, or does it require explicit entry?	Nonrecurring
Can a person have more than one entry of this element in a payroll period?	Yes
Process and pay element separately or with other earnings elements?	Process and pay with other earnings
What is the calculation rule?	Hours * Rate
What is the default periodicity of this element?	Hourly
Should this element be included in the earnings calculation of the overtime base rate?	Yes
Should this element be included in the hours calculation of the overtime base rate?	Yes

Define a Premium Overtime Element

This element calculates the premium portion of the person's pay.

Note: Premium rate is also known as the blended rate.

For example, you could configure a premium overtime element like this.

Field name	What you enter
Primary Classification	Standard Earnings
Secondary Classification	Premium
At which employment level should this element be attached?	Assignment Level
Does this element recur each payroll period, or does it require explicit entry?	Nonrecurring
Can a person have more than one entry of this element in a payroll period?	Yes
Process and pay element separately or with other earnings elements?	Process and pay with other earnings
Is the element subject to retroactive changes?	Yes

Attach this element to your nonexempt employees.

Configure the Premium Overtime Multiple Factor

The default multiple factor for premium amount calculation is 0.50. Once you have created the premium overtime element, you can modify its multiple factor.

For standard premium overtime elements, set the new factor on the Default value of its Multiple input value.

To change the multiple for a Time Card premium overtime element:

1. Start the Calculation Value Definitions task.

2. Select your US legislative data group.

3. Search for and select your premium overtime element.

4. Click Time Factor.

5. Under Calculation Values, click Edit and then Correct.

6. In Rate, enter the new overtime multiple. For example, enter 1.0 to change the rate to 100%.

7. Click Submit.

Create Element Eligibility

When you define a nonrecurring earnings element using the Premium secondary classification, the Elements task creates a <Base Element Name> Premium Adjustment indirect element. You must create element eligibility for this element.

In certain situations, the payroll process automatically includes this indirect element in the element entry. You don't need to add it. For example, if there is any overlap in overtime irrespective whether adjustment for overtime premium is available or not, the process creates the element entry for the adjustment element. In this case, the process:

1. Creates an adjustment for the premium portion of overtime for the entire overtime period

2. Automatically initiates a proration event

Whether the element entry is created depends on the base premium element.

If this is true about the base premium element	Will element entry be created?
Defined as nonrecurring	Yes
Defined as recurring	No
Has an earned date that falls between the last overtime period start date and the current pay period end date	Yes
Doesn't have an earned date that falls between the last overtime period start date and the current pay period end date	No
Earned date is null	No

When the process creates the premium adjustment element entry, the effective start date is equal to the current payroll period end date + 1 day. The effective end date is equal to the last overtime period end date.

Configure Existing Elements

Rather than define elements, you can use existing ones for standard and premium overtime calculations. These elements must have the following settings.

Field name	What you enter
Primary Classification	Standard Earnings
Secondary Classification	Overtime or Premium
At which employment level should this element be attached?	Assignment Level
Does this element recur each payroll period, or does it require explicit entry?	Nonrecurring
Can a person have more than one entry of this element in a payroll period?	Yes
Process and pay element separately or with other earnings elements?	Process and pay with other earnings
What is the calculation rule?	Hours * Rate
What is the default periodicity of this element?	Hourly

Use the Balance Definitions task to feed the predefined balances for the existing element. Search for the Overtime Hours and Overtime Earnings balances, and set the feeds.