What are the particulars in calculating “Overtime Payrolls” for your workforce? Frankly, there are several regulations that govern this process, but there are a few key points to bear in mind; most notably your calculations must be based on a 40 hour work week regardless of the pay period cycle. Here are a couple of examples to consider:
• Biweekly Pay Period
Simply pay overtime for any hours worked over 40 in each of the two weeks. The mistake some companies make is basing overtime on the entire two-week period, with overtime paid for any hours worked over 80.
• Semi-Monthly Pay Period
The twice-per month structure takes a bit more tracking to ensure correct payment of nonexempt employees. Since the pay period is normally based on calendar dates, the employer must look at where the work week falls during those dates. A work week will usually be split up among two pay periods, so the employer may be paying overtime that began accruing in the previous pay period.
To determine if your company’s payroll processing practices are in compliance with governmental rules and regulations contact your CPA, your PEO’s Payroll Departments, or an LL Roberts Group PEO Consultant (toll free) at 877.878.6463.
