Overtime averaging is a way for an employer and employee to average hours over a custom defined period. The period can be in weeks, or a month.
If there is an agreement to use overtime averaging, an Admin can configure this:
Account wide
To all employees classified under a certain Earnings Rule or Earnings Template
On an per employee basis
To set the contracted weekly hours for the (weekly) period, an 'Overtime Period' Earnings rule must be created:
The contracted weekly hours (overtime period) + Overtime Averaging period will determine the calculation of the averaging.
E.g:
Overtime Period hours = 38
Overtime Averaging = 2 (weeks)
Overtime will only apply once 76 hours have elapsed in a 2-week period.
Account Wide Overtime Averaging
If all employees have the same overtime averaging agreement:
Head to Settings > Timesheet.
View all timesheet settings
Expand to Show Advanced Settings.
Specify the period of time for averaging under the Overtime Averaging field.
This can be either in weeks or a month
Weekly Overtime example:
Monthly Overtime example:
Managed Template
If using a managed template:
Head to Compliance.
Click 'Manage' next to the relevant template.
Select 'Edit' under Maximum Shift Length.
Switch to the Period of Ordinary Hours tab.
Specify the period of time for averaging under the 'Overtime averaging period' field and the period start date.
This can be either in weeks or a month
Click Save.
Weekly Overtime Example:
Monthly Overtime Example:
Individual Overtime Averaging
If certain employees have an an arrangement for overtime averaging:
Enable Advanced Payroll Fields under Settings > Feature Management
Once enabled, head to Workforce > Staff.
Open the profile of the relevant staff member.
Switch to the Pay Conditions tab > Pay Configuration.
Specify the period of time for averaging under the 'Overtime averaging period' field and the period start date.
If Monthly, select the start day of the 'month'
"Update" employee details.
Weekly Overtime example:
Monthly Overtime example:
FAQs
Can I use account-wide averaging and individual averaging?
You can use a combination of averaging settings within an account. Settings on individual employee profiles will override settings inherited from the Earnings Rule template or organization-wide settings.
How is Monthly Overtime Averaging calculated?
The calculation for Monthly Overtime Averaging varies depending on the day on which the 'month' begins (as set on the individual, organization, or earnings setting):
If calendar month: ((weekly contracted hours* days in the month))/ 365 * 52 = Monthly contracted hours.
For example, this is the calculation for an employee who is contracted for 40h a week:
40*30 = 1200.
1200 / 365 = 3.3
3.3 * 52 = 171.6h for monthly overtime
If non 'calendar' month:
Days between the period are calculated (e.g. 10th May - 10th June), excl. the end day
((weekly contracted hours * days in the month)) / 365 * 52 = Monthly contracted hours
In both circumstances, the overtime rule will apply once Monthly contracted hours have elapsed.
*When enabling Monthly Overtime, if the number of worked hours doesn't equate to exactly one minute, we will round up to the closest minute.