| Classification: | Earnings |
| Category: | Overtime |
| Processing Type: | Nonrecurring |
The earnings type Overtime produces pay for overtime worked both at straight time rates and premium rates. You can provide the rate of pay for overtime work either as an entry to the input value Rate, or as an entry in the Wage Rates table, to be located by an entry to the input value Rate Code. Otherwise, the Overtime formula itself calculates the FLSA (Fair Labor Standards Act) overtime base rate.
For correct calculation of the FLSA overtime base rate, when you initiate an earnings type you must identify whether to include the pay resulting from the type in the overtime base rate calculation, and whether to count hours worked for the type as FLSA hours.
Attention: . Oracle Payroll does not support payroll periods greater then a single work week if you use the predefined Overtime element. If you use this element you must perform manual calculations of the overtime amounts. If you create user defined elements, the system supports all payroll and overtime periods.
See: Identifying the Earnings or Payment
The following table describes the input values for the Overtime element.
| Input Values | Purpose of Entry |
|---|---|
| Pay Value | Short-circuits formula and provides Overtime earnings run result. |
| Hours | Gives overtime hours worked to formula. |
| Rate | Gives formula the rates to use. Entries here override Rate Code entries. |
| Rate Code | Gives formula the codes by which to locate rates in the Wage Rates table. |
| Multiple | Gives rate multiple for overtime hours to formula. |
| Date Earned | For information only. |
| Jurisdiction | Location entered here prompts system to find the location's tax code in the table of jurisdiction codes, and use this code to override the code of the employee's regular work location. |
| Separate Check | Yes signals that this earnings should be paid by separate check. Default is No. |
| Deduction Processing | Tax Only means, process tax deductions only for this earnings. Tax and Pre-tax Only means, process only these deductions for this earnings. Default is All. |
The Overtime formula does the following:
Checks employee's job to see if it is exempt from overtime payments under Fair Labor Standards Act (FLSA) rules.
IF job is exempt
Issues message Job is exempt and stops payroll processing for the employee.
IF job is not exempt
Finds overtime rate using entry to Rate or Rate Code.
IF no entries exist
Calls function to calculate the overtime base rate. This function:
1) Determines pay this period for each earnings type entered for employee and identified as contributing to the overtime base rate.
For example, the following table shows two earnings types contributing to the overtime base rate:
| Earnings Contributing to Overtime Base Rate | Pay Amount |
|---|---|
| Regular Hours | $600.00 |
| Production Bonus | $200.00 |
| Total | $800.00 |
2) Determines hours worked this period for each earnings type entered for employee and identified as contributing to FLSA hours.
For example:
| Earnings Contributing to FLSA Hours | Hours Worked |
|---|---|
| Regular Hours | 40 |
| TOTAL | 40 |
Formula then produces direct result Overtime Pay:
= Overtime hours worked * overtime base rate
or
= Overtime hours worked * overtime base rate * Multiple.
Produces indirect result Straight Time Overtime Pay:
= Overtime hours worked * regular rate.
Also sends indirect result of hours worked and rate paid to Hours by Rate element for reports such as Statement of Earnings.