According to Fair Labor Standards Act (FLSA), a salaried non-exempt or hourly employee working more than 40 hours for a workweek are the overtime hours and the employees are eligible for overtime wages. Refer Overtime Calculation for Multiple Job Roles - An Overview to know multiple jobs overtime calculations.
Let’s look at a few scenarios for weekly and semi-weekly payroll on how overtime hours are calculated based on workweek.
Scenario - 1
Consider 37.5 hours work week and organization does not follow 40 hours rule for Over Time. (Hours worked after 37.5 will be considered as Overtime)
Payroll Frequency: Weekly
Total Hours for the payroll: 37.5hrs
If someone works for 39.5 hours in a week (which is more than 37.5 hrs), then that 2 hours will be considered as OverTime.
Employee Name: Dirk Nannes Jr
Compensation Type: Paid by the Hour
Wages: $10 Per Hour
In Payroll Step 1, calculation should be "Regular Hours" 37.5 * $10 = $375.00
"Overtime Hours" 2*15 = $30.00
Scenario - 2
Consider 37.5 hours work week and organization follows 40 hours rule for Over Time.
Payroll Frequency: Semi-Monthly
Total Hours for the payroll: 81.25hrs
If someone works for 39.5 hours in a week (which is more than 37.5 hrs), then that 2 hours will not be considered as OverTime. Only after 40 hours will be considered as Overtime
Employee Name: Jason Sr
Compensation Type: Salary/Eligible for Overtime
Wages: $100 Per Week
1) $100 * 52 weeks = $5,200 (Which is yearly salary)
2) 37.5 hrs * 52 weeks = 1950 hrs (For Annual)
3) $5,200/1950 hrs = $2.666666666666667/hour
In Payroll Step 1, calculation should be "Regular Hours" 81.25 * $2.666666666666667 = $216.67.
Refer Setting up Payroll Work Week to know more on setting workweek for your business in PayWow.