Account-wide overtime defaults are set on the Hourly tab of the Setup Wizard. If you need to adjust an individual’s settings, you can do this on the Options tab of the user’s Settings page. You will see the following options:
- No Overtime: Overtime is not calculated.
- Weekly Overtime: Used in most areas of the country. The adjustable, weekly default threshold is 40 hours.
- Daily Overtime: Used mainly in California and for anyone who pays double time.
- Overtime Cut-off Threshold: Used to determine the starting/ending point for calculating daily or weekly overtime.
We have included settings to help control the amount of overtime a user is able to accrue. You may:
- Restrict the number of hours that can be manually entered per day.
- Automatically deduct a lunch or unpaid break. (This feature can be helpful for employees who don’t clock in or out for lunch but take the same amount of time each day.)
For users that work a regular daily schedule you also may:
- Restrict a user from clocking in before his/her start time.
- Automatically clock a user out at the end of their shift, or be notified if they clock out late. (If you choose to have the system clock users out automatically, however, there must be a way to record any extra time worked after the automatic clock out. Either employees should be able to make manual entries to fill in the gap, email their supervisor, or something similar. For hourly employees, all time worked must be paid, whether authorized or not.)
Overtime on the Pay Period Report
Overtime is calculated on the Pay Period Report and its preview report only (to preview a period, see the Preview Pay Period Report on the Reports page). On the report, you will see columns for regular time (1x), time and a half (1.5x), and double time (2x).
If you see more overtime than expected, that may be because there are some hours from the previous pay period that need to be figured in current overtime calculations. This can occur when you run payroll in the middle of the workweek. You might do this for a couple of reasons.
- Running payroll bi-monthly – If you close out payroll on a Wednesday, for example, then the hours worked before the overtime cutoff in that pay period will be counted towards the total hours worked that workweek in the next pay period.
- Setting the workweek in the middle of the week – Even if you run payroll at the end of the week, you can still cut off their workweek. When an employee’s workweek is set to the middle of the week instead of Sunday night at 12am, then running a weekly or bi-weekly payroll can cut the workweek in half. The totals won’t be incorrect, just a little harder to understand and anticipate. This is why it’s best to keep the workweek set to a time when the employee doesn’t work.
In both of these examples, the carry-over regular hours have already been paid. The hours from the previous week (but current workweek) are only used to determine the number of hours over 40.
Overtime to Comp Time
Please see the Add Comp Time topic in the Time-Off & Accruals section.