Payroll Cycle Change: Overtime Payment Process
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1 Payroll Cycle Change: Payment Process It is important that employees receive all overtime pay to which they are entitled during the alignment of the University s payroll cycle. is defined as the total time physically worked over 40 hours in a workweek. To ensure that overtime is accurately calculated during the transition, the University will follow Fair Labor Standards Act (FLSA) guidelines. This document outlines the procedure that was followed to determine any applicable overtime amount due to UM staff and student employees. 1. How will Payroll determine the amount of overtime I am entitled to during the payroll cycle change? Payroll will follow the following steps to determine overtime pay during the payroll cycle change: Step 1: We will obtain the total number of hours you work during each of the following time periods. UM Hourly Students Short Pay Week July 12 July 16, 2014 Old Pay Week July 12 July 18, 2014 New Pay Week July 17 July 23, 2014 Total Short Pay Week 41 Old Pay Week 52 New Pay Week 45 Step 2: We will then determine the number of overtime hours you earned during each of those time periods. Total Paid Short Pay Week 41 1 July 31, 2014 Old Pay Week New Pay Week 45 5 August 8,
2 Step 3: hours earned in the Short Pay Week will be included in your July 31, 2104 pay check. To avoid double payment of these hours in the future and to determine the Carryover total, the Short Pay Week overtime total will then be subtracted from the Old Pay Week overtime total. Old Week OT Short Week OT Carryover OT Step 4: earned in the New Pay Week will be included in your August 8, 2014 pay check. To avoid double payment of these hours and to determine the Final Due amount, the New Week total will be subtracted from the Carryover total, which will be included in your August 8, Carryover OT New Week OT Final Paid August 8, How will Payroll determine my pay rate for the overtime due as a result of the payroll cycle change? When will I be paid for those hours? All of the hours worked between July 12 and July 16, 2014 will be paid in your July 31, 2014 pay check, and those worked between July 17 and July 23, 2014 will be paid in your August 8, 2014 pay check. Because there is no break in dates between these two time periods, you will be paid at your normal hourly base rate (1.0 times your normal pay rate) for each hour worked. If you earn overtime during either of these two time periods, those hours will be paid at 1.5 times your hourly base rate. After the July 31 pay check is cut, an overtime comparison will be performed to determine if any overtime hours were inadvertently paid at your normal hourly base rate. In this case, those overtime hours will be paid out in your August 8, 2014 payroll check at a half-time rate (0.5 times your normal pay rate) to make you whole. 2
3 Short Pay Week Regular *Regular Amount * Amount Paycheck Amount Pay date 40 1 $400 = ($10 x 40) $15 = ($15 x 1) $415 July 31, 2014 New Pay Week 40 5 $400 = ($10 x 40) $75 = ($15 x 5) Final $30 = ($5 x 6) $505 August 8, 2014 *Pay Rates Hourly Rate Explanation Regular $10/hour n/a $15/hour $10 x 1.5 = $15 Comparison $5/hour $15 $10 = $5 3. How will the overtime due as a result of the payroll cycle change show on my August 8, 2014 pay check stub? Any overtime due as a result of the payroll cycle change will appear on your August 8, 2014 pay check stub under one of the Comparison or OTC earning codes, for instance 364 OTC 0.5 %. 4. Did the overtime review consider account moves or changes that were entered in the Kronos timecard? Yes. We reviewed the hours worked on Thursday, July 17, 2014 and Friday, July, 18, 2014 to determine if any hours were charged to another account on this date. 5. How are timecard revisions going to be handled for 7R06 (July 5 to July 16, 2014) and 7R07 (July 17 to July 30, 2014)? Revised timesheets will be processed as any other revisions would be processed. We will then conduct a similar overtime comparison for all revisions submitted for either 7R06 (July 5 to July 16, 2014) or 7R07 (July 17 to July 30, 2014). In order to facilitate this review, an additional form will need to accompany any revised timesheets submitted for these two pay periods. The Comparison form will provide daily totals of actual hours worked for the two pay weeks affected in the payroll cycle change. If, as a result of the revision process and OT comparison, more OT is due, 3
4 the difference will be added to the employee s next pay check. If the new OT amount is less than what was paid, the difference will be removed from the employee s next pay check. All additions and subtractions will be applied using the pay rate information mentioned in question 2 and using the Comparison or OTC earnings codes. Example 1: No Change to the Final OT Amount Sebastian s supervisor submits a revision saying he worked five more hours in the Short Pay Week. These hours will be added to both the Short Pay Week and the Old Pay Week totals. #1 Comparison Short Pay Week Old Pay Week New Pay Week 45 5 Carryover OT* 11 (17 6) 6 (11 5) 0 (6 6) *Carryover OT is the result of the overtime that would have been paid in the old pay week less the overtime that was paid in the short pay week. Please refer to question 3 for additional information. This revision results in no change to the original calculation, so no change will be made to Sebastian s overtime comparison entry. Example 2: Increase in the Final OT Amount Sebastian s supervisor submits a revision saying he worked three additional hours on Thursday, July 17, These hours will only be added to the Old Pay Week total. #2 Comparison Short Pay Week 41 1 Old Pay Week New Pay Week 45 5 Carryover OT 14 (15 1) 9 (14 5) 3 (9 6) This revision results in three additional hours of overtime for Sebastian. Three additional hours will be included in Sebastian s next pay check at the appropriate Comparison earning code, along with any changes that would have resulted from the normal Revised Timesheet process. See questions 2 and 3 for information on the applicable pay rates and Comparison earning codes. 4
5 Example 3: Decrease in the Final OT Amount Sebastian s supervisor submits a revision saying he worked an additional 4 hours in the New Pay Week. These hours will be added to the New Pay Week total. #3 Comparison Short Pay Week 41 1 Old Pay Week New Pay Week Carryover OT 11 (12 1) 2 (11 9) - 4 (2 6) This revision results in a four hour reduction in the overtime hours for Sebastian. A four hour reduction will be included on Sebastian s next pay check, along with any changes that would have resulted from the normal Revised Timesheet process. The hours will be removed starting with the lowest Comparison (OTC) earning code used in the original comparison payout. 5
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