When setting up a time clock for a worksite, the FLSA overtime rule is automatically applied, to ensure that hours worked above forty (40) in a workweek are recorded as overtime on worker time cards. If you need to pay overtime for hours worked below forty (40) in a week, such as daily or 7th day overtime, you can add a custom overtime rule. Overtime laws by state→
Overtime rules can include:
- Weekly overtime
- Daily overtime
- Daily double overtime
- 7th day overtime
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Once your overtime rule is created, it can be added to a Time Clock. When you assign a Time Clock to a worksite, employees at that worksite can clock in and out using OnPay.
When you set up a Time Clock for workers to clock in and out, the selected overtime rule is automatically applied whenever an employee's worked hours exceed a specified amount within a specified timeframe, like 40 hours in a week, or 8 hours in a day.
Creating a custom overtime rule
Go to Time, and click Settings.
Below "Overtime Rules", click Add Custom Rule.
Rule Name
Give this overtime rule a name that's relevant and easy to recognize.
Weekly Overtime
Enter the amount of hours in a workweek an employee can work before overtime is applied. This number cannot be greater than 40 (the FLSA standard).
Daily Over/Double Overtime
Enter the total number of hours in a day an employee can work before earning overtime/double overtime. For example, some employers pay employees daily overtime for working over 8 hours in a day, and double overtime for over 12 hours in a day, even if the total hours for the week are below 40.
*Overtime pay for hours below 40/week may not qualify for a tax deduction under OBBBA.
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Example of daily overtime:
In the example below, a part-time employee worked 23 hours within a workweek in a state with a daily overtime rule of 8 hours. Even though their hours did not exceed 40 for the week, their wages for the week should include 2 hours of overtime pay.
Monday Tuesday Wednesday Thursday Friday Saturday Sunday - - 6 7 10 - - - Wednesday = 6 regular hours
- Thursday = 7 regular hours
- Friday = 8 regular hours + 2 overtime hours
- Total regular hours = 21
- Total overtime hours = 2
This concept also applies to Daily Double Overtime, and Seventh Day Overtime.
Seventh Day Overtime
In some states, like Kentucky, overtime pay is owed when an employee works on the seventh consecutive day.
Meaning, if they've already worked any amount of time during each of the previous six days, overtime should apply to any hours worked on the seventh day, even if the total hours for the week are below 40.
Click Save to add your custom rule to your Overtime Rules.
When you add a Time Clock, you'll now have this custom rule available to select.
Viewing/editing a custom rule
You can view the details of an overtime rule by clicking it in the Overtime Rules list.
At the bottom of a custom overtime rule's details, you'll see an Edit button. This allows you to make changes to this rule, whether it's to make a correction, or to update it based on new overtime legislation.
What's overtime?
Federal overtime law
The Fair Labor Standards Act (FLSA) is a Federal labor law enacted in 1938 to establish certain protections for workers. Among these protections is the right to earn overtime pay (1.5 times regular rate) for hours worked over 40 within a workweek (defined as seven consecutive days or 168 consecutive hours). FLSA does not mandate overtime pay for holidays.
State overtime laws
States may enact additional labor laws to further protect employees working within their borders. For example, in California, employees earn (1.5x) overtime pay for working over 8 daily, over 40 weekly, and on the 7th consecutive day, with (2x) double overtime pay for working over 12 hours in a day. State overtime laws must always meet or exceed federal overtime laws. Overtime laws by state→