As an employee can have multiple overtime policies, it is important to be aware of how these multiple policies can interact and calculate the employee's time card. A general rule of thumb for how an employee's time would calculate is whatever would trigger first.
Employee and Location Overtime
If an employee has both employee and location overtime policies, it will use the overtime rule that the employee would qualify for first.
For example, we have an employee who has worked 10 hours today and they have two daily overtime rules, employee and location, with the following overtime rules:
- Employee Daily Overtime Policy - Anything over 8 regular hours is overtime.
- Location Daily Overtime Policy - Anything over 10 regular hours is overtime.
Based on the rules above, the employee would receive 8 regular hours and 2 overtime hours as they would qualify for the employees daily overtime before the location's daily overtime would take effect.
Daily and Weekly Overtime
Similar to if an employee had employee and location overtime policies, if an employee were to have daily and weekly overtime, it would calculate the overtime based on whatever they would qualify for first.
For our example, we have an employee working in California and has the following overtime rules.
- Daily Overtime - Anything after 8 hours is overtime.
- Weekly Overtime - Anything after 40 hours is overtime.
The employee's time card calculates as:
- Monday - 8 Hours (Regular)
- Tuesday - 8 Hours (Regular)
- Wednesday - 8 Hours (Regular) & 2 Hours (Overtime)
- Thursday - 5 Hours (Regular)
- Friday - 8 Hours (Regular)
- Saturday - 3 Hours (Regular) & 2 Hours (Overtime)
On Wednesday, they worked for 10 hours total. 8 of those hours were calculated as regular with 2 hours calculated as overtime. This is due to the Daily Overtime rule calculating anything after 8 regular hours in a day as overtime.
On Saturday, they worked for 5 hours total. 3 of those hours were calculated as regular with 2 hours calculated as overtime. Since the employee crossed the Weekly Overtime threshold in the middle of their workday, the remainder of their workday is overtime.