Gallup’s report presents interesting facts about overtime, “adults employed full time in the U.S. report working an average of 47 hours per week, almost a full workday longer than what a standard five-day, 9-to-5 schedule entails.” More and more workers spend extra time at work. This happens due to an overload of work, distractions or even because of the willingness to be promoted. But overtime work, like regular work hours, has to be paid.
Overtime is added work hours of a worker and these hours are compensated at a higher rate. Overtime pay is set by the FLSA (the Fair Labor Standards Act). The rate of overtime compensation is not less than one and one-half times the normal rate of pay, and it is expected after 40 hours of work in a workweek.
You have to comply with the requirements especially if you work in a private sector and Federal, State, and local governments. Contrarily, you’ll have to pay a penalty of more than $1.000.
Salaried workers might be exempted from overtime remuneration if they hold a special position with specific duties or their weekly income surpasses a specific amount.
No matter which division you run your business in when it comes to overtime compensation, you should always heed the rules. Not only to comply with the law regulations but also to entertain your employees respectfully.
How to Calculate Work Hours and Overtime?
Overtime pay may depend on the land you live in. The law might vary, so it’s necessary to check the rules. And you can pay your workers more for their extra work, but never less than the law defines it.
If your workers are paid a particular salary, you need to make an easy calculation. For instance:
Your worker earns $10/hour, and he served 50 hours during a workweek → $10 x 1.5 = $15 x 10 overtime hours → $150
Though, it is different with hourly workers. In order to calculate overtime compensation, first, you must know how much you are paying your workers per hour. It may not be challenging to calculate an hourly rate. However, it is best to apply tools, either work hours and overtime calculator or time tracking software.
How Can Time Tracking Help?
If the simplistic calculation of hourly rate & overtime pay solves your matter, it’s amazing! However, for some companies, contractors, and business it is not enough. Sometimes more information may be essential to make sure that all perspectives of overtime are under control.
This is why using a good time to track software is important. Here is a short guide on the most prevalent matters concerning overtime and work hours and how you can deal with them with a time tracking software.
- Work hours and hourly rate
Keeping a transparent and comprehensive report on work hours of workers is often one of the most significant challenges organizations face. Incorrect reports, mistakes in timesheets or wrong log of work hours are only just a couple of difficulties. If not appropriately approached, they may contribute to more severe problems. Without clearly defined hourly rate and an overview of work hours, it is hard to determine overtime pay.
Some software like TimeLive works not only as a time tracking software. You can utilize it as a project management tool. It will ease you keep all the data in one place without the need of using two separate tools:
- Manage projects and tasks
- Have a complete history of your project portfolio and actual vs. estimated time
- Invoice your clients
- Manage all activities related to timesheets
- Integrate it with other tools for more efficient work.
All the information on employees work is necessary to keep financial stability but also to have insight into the information whenever you need.
No matter which sector you work in, it may happen that an audit will be carried out in your company. This is particularly important if you’re a government contractor. You will need all the data about your business activity, financial statements, timesheets, reports, etc