Overtime Rules

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How is overtime calculated?

Purpose: FLSA requires that time and a half (1.5x) is paid for any hours worked over 40 hours in a single workweek. We know that some states have laws that go above and beyond that minimum requirement. Canadian overtime calculations are determined by province and must adhere to their own specific qualifications. This guide will give you more information about how we have taken this into account to make sure you are paying your employees correctly.

Table of Contents

Standard U.S. & Canada Rules

Standard rules use automatic calculations based on U.S. State and Federal overtime rules, and Canadian Province overtime rules. The employee's location (listed on the Job tab) will determine which rules are applicable.

Custom Rules

If your employees work outside of the U.S. and Canada or follow an alternate work schedule, you can input your company's specific overtime rules. These rules will apply to all employees enrolled in Time Tracking and will be used instead of the standard rules.

  • Daily Overtime - 1.5x the rate of pay for any hours worked over [x] hours in a day
  • Daily Double Overtime - 2x the rate of pay for any hours worked over [x] hours in a day
  • Weekly Overtime - 1.5x the rate of pay for any hours worked over [x] hours in a week

Changes made to overtime calculations will update immediately and backtrack to the beginning of the current pay period. 

If an Account Owner/Full Admin user edits an approved or past unapproved timesheet, overtime will be recalculated based on current overtime settings.

Daily + Daily Double + Weekly

When daily overtime hours (all hours paid at 1.5x and 2x regular rate) are equal to or more than the weekly overtime hours, the employer must pay out according to the daily overtime rules for that employee that week. (All weekly overtime hours are already accounted for and paid.)

If the number of weekly overtime hours is more than the total daily overtime hours (all 1.5 and 2x regular rate) for that workweek, then the employer must ensure that all the weekly overtime hours are paid out in addition to the daily overtime. It is imperative that any double time hours required under daily overtime rules are identified and paid out at double time accordingly.

Work week

For calculating overtime, it is important to know the date and time of when the workweek starts and ends. In the United States, the most common workweek begins on Sundays at 12:00 AM but can be any consecutive 168 hours.

When you set up BambooHR Time Tracking, you need to determine what day you would like the workweek to start. The default is set to Sunday.

If you edit the start date of the workweek after you have enabled Time Tracking, you will see a note that this change will take effect at the start of the next pay period. There will be some noted days on the next timesheet where overtime cannot calculate. Full Admin users will need to add overtime during the transition pay period manually.

Locations of employees for overtime calculation

Location

To determine which state, U.S. Territory, or Canadian province, to use for overtime for the employee, we first look at the employee's location in their Job Information table. If an employee's location includes a state, U.S. Territory, or Canadian province, we can calculate overtime for that employee.

It is important to note if you have selected the standard overtime rules option and the business location is outside the United States or Canada or does not have a state, U.S. Territory, or Canadian province listed in the address, we cannot calculate overtime for employees at that location.

Do you need help adding addresses to your locations? Learn how to do this here.

Personal addresses

If an employee is part of a remote location, we will use the employee's personal address to calculate overtime. If their personal address shows a state or territory in the United States, we use the laws of that state or territory to calculate overtime.

If their personal address is outside of the United States or there is no state or territory listed, we cannot calculate overtime for the employee.

Employees with no state or province location to calculate overtime

The Location column in Time Tracking settings will indicate employees without a U.S. state or Canadian province assigned.

You can still enable the employee, but overtime will not calculate for the employee until you add them to a location with a state or province listed.

You will need to add or edit hours on an employee's timesheet manually to trigger recalculations of overtime if the employee has their status changed from exempt to non-exempt for overtime (including the employee having a US state listed). You can do this by opening the edit option for an entry and selecting Save. This action recalculates that entry along with any other entries for the specific pay period. 

Location and Custom Rules

If you select the Custom Overtime Rules option, the Location column will list the title of the location the employee is assigned to in their Job Information table. The Overtime State column will show Custom for all non-exempt employees. Exempt employees will show as Exempt. Note that all employees will adhere to the custom rules set in Time Tracking settings.

Exempt employees

If an employee's overtime status is Exempt in the Compensation table, BambooHR will not calculate overtime for the employee.

Overtime will not automatically calculate if an employee goes from exempt to non-exempt. You will need to open the time entry modal and select Save to update the entry.  Re-saving an entry will recalculate the entire pay period, which eliminates any extra manual work.

Salary, non-exempt (BambooHR Payroll customers)

If you are a BambooHR Payroll customer, you will see the two fields combined within the Compensation table for employees that are salary and non-exempt, which populates a new field that identifies the overtime rate syncing to payroll. 

Additionally, a "double time rate" will automatically calculate based on the amount entered in the Overtime Rate field. The double time rate is for informational purposes only and viewable when editing an employee's compensation information.

Overtime rules for specific states

FLSA requires that time and a half (1.5x) is paid for any hours worked over 40 hours in a single workweek. The default function for states not listed below will default to that 1.5x calculation. The following states have different overtime rules that have been programmed into BambooHR.

Alaska

  1. Overtime hours will count for any time worked after 8 hours in a single workday or 40 hours in a week.
  2. If a shift spans midnight in the employee's time, the overtime stops at midnight, and then hours start over for the new day.

California

  1. Overtime hours include any time after eight hours in a single day, 40 hours in a week, or on the first eight hours on the seventh consecutive workday in a workweek. All of these are paid at 1.5x the hourly rate.
  2. A 2x pay rate applies after 12 hours in a single day or eight hours on the seventh consecutive day.

A breakdown of overtime hours, 1.5x vs. 2x, will only show if a comparison is necessary. It will not show if the employee was only eligible for the 1.5x hourly rate. This breakdown of overtime hours show in the following places in BambooHR when applicable:

  • Employee's view: Timesheet and timesheet summary.
  • Approver's view: Approval notification in BambooHR, approval email notification, and approval in timesheet details.
  • Admin's view: Payroll Hours report (1.5x and 2x differentiates in the same column) and Payroll Hours report export (each rate shows in a separate column).

It is important to note that BambooHR Time Tracking calculates overtime based on a 12:00 AM to 11:59 PM workday. If your company operates an overnight shift and an employee works overtime past midnight (i.e. 5:00 PM to 2:00 AM for a total of 9 hours), the calculation is no longer factoring overtime for a shift longer than 8 hours due to the timesheet resetting at midnight. 

Colorado

Overtime hours include any hours past 12 consecutive hours within the same day. This does not include hours that span over several days. 

Kentucky

  1. Overtime hours will count for any time worked after 40 hours in a week.
  2. Overtime hours will count for any time worked on the seventh consecutive day in a workweek.
    1. Workweeks only have seven days, so it is only possible for a single day.
    2. Any hours worked on the previous six days counts that day as a day worked.
    3. Overtime ends at midnight on the seventh day.

Puerto Rico

  1. Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.
  2. Overtime hours will count for any time worked on the seventh consecutive day in a workweek.

U.S. Virgin Islands

  1. Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.
  2. Overtime hours will count for any time worked on the sixth and/or seventh consecutive day in a workweek.
Overtime rules for specific Canadian provinces

Alberta

Overtime hours will count for any time worked after 8 hours in a day or 44 hours in a week.

British Columbia

  1. Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.
  2. Overtime pay will be double (2x) for any time after 12 hours in a day.

Manitoba

Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.

New Brunswick

Overtime hours will count for any time worked after 44 hours in a week.

Newfoundland and Labrador

Overtime hours will count for any time worked after 40 hours in a week.

Nova Scotia

Overtime hours will count for any time worked after 48 hours in a week.

Ontario

Overtime hours will count for any time worked after 44 hours in a week.

Prince Edward Island

Overtime hours will count for any time worked after 48 hours in a week.

Quebec

Overtime hours will count for any time worked after 40 hours in a week.

Saskatchewan

Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.

Yukon

Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.

Northwest Territories

Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.

Nunavut

Overtime hours will count for any time worked after 8 hours in a day or 40 hours in a week.

Overtime on the employee profile

Overtime information will show on an employee's Timesheet tab in the following places:

  1. Daily graph: If a specific day within a time frame has overtime added, the day will show as an orange-colored bar on the graph.
  2. Overtime total: The total overtime for the pay period shows in the time summary.
  3. Daily view: The total amount of overtime for a specific day shows next to that day on the timesheet.

Note that if an employee has paid time off, it will not apply to overtime. For example, I worked 38 hours and had four hours of paid time off, and I still only worked 38 hours and did not get overtime for having over 40 hours in the workweek.

Overtime view for approvers

Email notification

When an approver receives an email notification to review timesheets, the total hours will appear for each employee with a link to view their timesheet. If an employee has overtime hours, it will show in the email notification.

An employee's timesheet

When approving on the Timesheet tab, overtime hours will show in the specific timesheet summary.

Payroll Hours report

When approving from the Payroll Hours report, overtime hours will show in the Overtime column.