GAP 101.54, Time Reports - Overtime Hours Premium

  1. General
  2. Determining Overtime Hours-All Employees
  3. Determining Overtime Hours-Overtime Option 1
  4. Determining Overtime Hours-Overtime Option 2
  5. Determining Overtime Hours-Overtime Option 3
  6. Employees with Secondary Jobs
  7. Biweekly Special Overtime Hours Report

I. GENERAL

The Fair Labor Standards Act (FLSA) requires that an employee be compensated for each overtime hour at the rate of one and one-half (1.5) times the employee's hourly rate or one times the hourly rate and one-half times the employee's adjusted rate for the workweek. The FLSA defines overtime hours as hours worked in excess of 40 hours in a workweek. However, it permits a hospital to determine overtime hours based on the hours worked in excess of 8 hours in a workday or 80 hours in a 14-day work period, whichever is greater.

The University has elected to determine overtime hours for most non-hospital employees as hours worked in excess of 8 hours in a workday or 40 hours in a workweek, whichever is greater. This policy exceeds the requirement of the FLSA.

The overtime option code for each hourly-paid employee is entered on the Hire From and can be changed via the Staff Change Form. The overtime codes are:

Code   Description
1
  Based on the hours worked in excess of 8 hours in a workday or 40 hours in a workweek, whichever is greater.
2
  Based on the hours worked in excess of 8 hours in a workday or 80 hours in a 14-day period, whichever is greater. This overtime option is only applicable to hospital employees on the fourteen day work schedule.
3
  Based on the hours worked in excess of 40 hours in a workweek. Normally employees can be paid overtime by this method only if they work a permanent ten or twelve hour per day work schedule or a schedule which frequently involves varying hours each work day. Duke student employees and casual labor must be paid by this method.

The payroll system determines the overtime hours for an employee based on the employee's overtime option and the hours reported on the time report. However, payroll clerks must calculate overtime hours in the following situations:

  • when an employee works a shift crossing over workdays and/or workweeks (see GAP 101.51, Time Reports-Workdays/Workweeks).
  • to pay for the 7th consecutive day worked according to Union Locals 77 and 465 contractual provisions
  • in order to calculate premiums - University policy prohibits combining overtime with other premiums

II. DETERMINING OVERTIME HOURS - ALL EMPLOYEES

Hours worked, including time spent in authorized meetings, training classes and other University sponsored programs, and hours for holiday and election leave are used to determine overtime hours. Vacation, sick, funeral, and jury duty leave are not used to determine overtime hours.

Holiday hours are used to determine overtime hours unless a designated holiday is taken on a day which also has worked hours (note: discretionary holidays can not be taken on days with hours worked). When both hours worked and designated holiday hours are listed for the same workday (i.e., when the employee elects to take payment for a designated holiday rather than a day off later), the greater of hours worked or hours off is used to determine overtime premium hours; hours worked and hours off for a designated holiday must not be combined in determining overtime hours.

In the following example, the employee normally works an 8-hour day and is paid overtime under option 1 (based on the hours over 8 in a day or 40 in a week). He was required to work on Labor Day and elected to receive holiday pay on the same day, so hours worked and designated holiday hours are listed for the same workday. The employee will receive 8 hours of Holiday Premium pay (holiday premium hours can not exceed the employee's normal workday schedule). The 9 hours worked on Labor Day are used to determine overtime hours - the 9 hours worked and 8 designated holiday hours are not added together to determine overtime. Therefore, the employee will receive one hour of overtime.

Overtime Premium, ex.1

Exception: Prorata Holidays and Overtime

In rare instances, both hours worked and hours off on a holiday are combined to determine qualifying overtime hours. Unlike the situation described above when hours worked and hours off on a designated holiday reflect essentially the same hours, employees who are eligible for a pro rata share of a holiday or who are eligible for a portion of a holiday because they work a 10-hour workday schedule, may elect to work the remaining hours of the scheduled shift or more the same day. In this situation, hours worked and hours off on the holiday are added together to determine overtime hours because they reflect different hours -- the holiday share is taken off and the employee comes in to work. Normally an employee would take the remainder of the day off as vacation. Payroll clerks should attach a note to the time report to indicate that a pro rata holiday is being reported.

In the following example, the employee normally works 8 hours per day Wednesday, Thursday, and Friday and receives overtime on the 8/40 option. She took her pro rata share of Labor Day on a scheduled workday and then returned and worked 4.2 hours. In determining overtime hours, the 4.2 hours worked and the 4.8 hours off for the holiday are combined for Wednesday of the second workweek, resulting in one overtime hour. No holiday premium hours are reported, because the employee observed her total holiday (4.8 hours) and therefore did not work on the same hours of the pro rata holiday.

Overtime Premium, ex.2

Federal agencies, including the National Institutes for Health and the National Science Foundation, allow for the charging of overtime premiums in accordance with the established practices for the institution.  Individuals charging overtime to sponsored codes, including federal sponsors, should adhere to the same distribution structure as described within this procedure.

III. DETERMINING OVERTIME HOURS - OVERTIME OPTION 1

Under overtime option 1, overtime hours are those over 8 in a workday or 40 in a workweek, whichever is greater. To calculate the correct number of overtime hours for the workweek:

  • For the seven days of the workweek, add hours worked, holiday pay hours, and election leave hours (see explanation for handling holiday hours in section II). Subtract 40 from these hours; the remainder equals one possibility of overtime hours for the workweek.
  • For each workday of the workweek, add hours worked, holiday pay hours, and election leave hours (see explanation for handling holiday hours in section II). For each workday, subtract 8 from the hours determined; the remainder equals the overtime hours for the day. Add the overtime hours for each day of the workweek - this equals the second possibility of overtime hours for the work week.
  • The greater overtime hours of these 2 possibilities is used to pay overtime premium.

Example:
An employee works 8 hours per day Mon, Tues, Wed, Thurs, and Fri and 4 hours on Sat. Using the 40 hour/week rule, there would be 4 overtime hours (8+8+8+8+8+4 = 44 - 40 = 4). Using the 8 hour/day rule, there would be 0 overtime hours (no days exceeded 8 hours per day). Overtime will be paid on 4 hours, the greater amount.

Example:
An employee works 8 hours per day Mon, Wed and Thurs. On Tues he works 13 hours and on Fri 3 hours. Using the 40 hour/week rule, there would be 0 overtime hours (8+13+8+8+3 = 40 - 40 = 0). Using the 8 hour/day rule, there would be 5 overtime hours (for Tues only: 13-8=5). Overtime will be paid on 5 hours, the greater amount.

IV. DETERMINING OVERTIME HOURS - OVERTIME OPTION 2

Under overtime option 2, overtime hours are those over 8 hours in a workday or 80 hours in a two week (14-day) period, whichever is greater. To calculate the correct number of overtime hours:

  • For the 14 days of the workweek, add hours worked, holiday pay hours, and election leave hours (see explanation for handling holiday hours in section II). Subtract 80 from these hours; the remainder equals one possibility of overtime hours for the workweek.
  • For each workday of the two week period, add hours worked, holiday pay hours, and election leave hours (see explanation for handling holiday hours in section II). For each workday, subtract 8 from the hours determined; the remainder equals the overtime hours for the day. Add the overtime hours for each day of the 14-day workweek - this equals the second possibility of overtime hours for the workweek.
  • The greater overtime hours of these 2 possibilities is used to pay overtime premium.

Example:
In the first week, an employee works 8 hours per day Mon, Tues, Wed, Thurs, and Fri. In the second week, she works 8 hours per day Mon, Tues, Wed, Thurs, Fri, and Sat. Using the 80 hour/week rule, there would be 8 overtime hours (8+8+8+8+8+8+8+8+8+8+8 = 88 - 80 = 8). Using the 8 hour/day rule, there would be 0 overtime hours (no days exceeded 8 hours per day). Overtime will be paid on 8 hours, the greater amount.

Example:
In the first week, an employee works 8 hours per day Mon, Tues, Wed, Thurs, and Fri. In the second week, he works 8 hours Wed, Thurs, Fri, Sat and 11 hours on Sun. Using the 80 hour/week rule, there would be 3 overtime hours (8+8+8+8+8+8+8+8+8+11 = 83 - 80 = 3). Using the 8 hour/day rule, there would also be 3 overtime hours (for Sun only: 11-8=3). Overtime will be paid on 3 hours.

V. DETERMINING OVERTIME HOURS - OVERTIME OPTION 3

Under overtime option 3, overtime hours are those over 40 hours in a workweek. To calculate the correct number of overtime hours for the workweek: For the seven days of the workweek, add hours worked, holiday pay hours, and election leave hours (see explanation for handling holiday hours in section II). Subtract 40 from these hours.

Example: An employee works 8 hours per day Mon, Tues, Wed, Thurs, and Fri and 7 hours on Sat. Overtime will be paid on 7 overtime hours (8+8+8+8+8+7 = 47 - 40 = 7).

VI. EMPLOYEES WITH SECONDARY JOBS

To comply with the FLSA, all hours worked by an hourly employee at Duke University must be used to determine overtime hours. If an employee works a secondary job (or jobs), the hours from the primary and secondary jobs are combined to determine overtime hours. The payroll system will calculate the total overtime hours based on the overtime option of the employee's primary position. Exception: If an employee's primary position is in the hospital and pays overtime using option 2 (over 8 hours in a day or 80 hours in a 14 day period) and the employee has a secondary job not in the hospital, then overtime hours cannot be determined using 8/80. The payroll system overrides the 8/80 option and determines the overtime hours based on the excess of hours over 8 in a workday or 40 hours in a workweek, whichever is greater, for the duration of the secondary job.

In the following example, assume the employee is paid overtime on all hours worked over 8 in a day or 40 hours in a workweek. He works in both a primary and secondary job at Duke. In the first week, he would receive overtime pay on 4 hours as calculated below:

First Workweek  
M
T
W
Th
F
S
S
Total
Primary job  
0
8
8
8
10
4
0
38
Secondary job  
2
0
2
0
0
0
0
4
_______________  
___
___
___
___
___
___
___
____
Total hours per day  
2
8
10
8
10
4
0
42
Hours over 8/day  
2
2
4

PRIMARY TIME REPORT
Overtime Premium, ex.3

SECONDARY TIME REPORT
Overtime Premium, ex.4

VII. BIWEEKLY SPECIAL OVERTIME HOURS REPORT

The Biweekly Special Overtime Hours Report (orange) is used in these situations:

  • To report the hours worked on the seventh consecutive day of work according to the terms of the Union contract (Locals 77 & 1328 & 465), if those same hours would not be recognized by the automated system as hours creating overtime hours.
  • To report additional overtime hours in situations when the payroll system can not determine the correct overtime hours because of the way hours are reported on the time report when an employee works a shift crossing over workdays and/or workweeks. Refer to General Accounting Procedure No. 101.51 for detailed examples.

Any overtime hours reported on the Biweekly Special Overtime Hours Report must relate to the employee's primary position. Only report hours in addition to the overtime hours which will be calculated by the payroll system. Following is an example of reporting the hours worked on the seventh consecutive day of work:

PRIMARY TIME CARD
Overtime Premium, ex.5

 

SPECIAL OVERTIME HOURS REPORT
Overtime Premium, ex.6