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Overtime Premium Settings for Multiple Pay Rates

Calculating overtime and double overtime for workers who have multiple pay rates can be done in one of two ways.

Regular rate of pay: the weighted average of hourly rates worked during the work week

Highest pay rate: the highest hourly rate worked during the work week

The calculation you select will apply to both overtime and double overtime earnings types for your workers with multiple pay rates.

  1. Open the Payroll app and navigate to the Settings tab.
  2. In the Features section, click the Set up your overtime premium calculation link.
  3. In the pop-up window, you'll choose one of the two overtime premium calculations.
  4. If you select Regular Rate of Pay, then you'll be prompted to choose which Earnings* will be included in the average rates.
  5. Once you've selected the Earnings, Save.

*Note: It's recommended to include Regular Earnings, as well as any other Pay Types that might qualify to be included in the Regular Rate of Pay. Ultimately, please refer to your FLSA guidelines.
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Depending on where your company and workforce resides, there may be an advantage to choosing one of the overtime calculation methods due to state regulations. Some states have overtime rules that go beyond what is mandated by the FLSA and Department of Labor

Each state's labor jurisdiction is linked below for your convenience.

Alabama 
Alaska 
Arizona 
Arkansas 
California 
Colorado 
Connecticut 
Delaware 
Georgia 
Hawaii 
Idaho 
Illinois 
Indiana 
Iowa 
Kansas 
Kentucky 
Louisiana 
Maine 
Maryland 
Massachusetts
Michigan 
Minnesota 
Mississippi 
Missouri 
Montana 
Nebraska 
Nevada 
New Hampshire
New Jersey 
New Mexico 
New York 
North Carolina 
North Dakota
Ohio 
Oklahoma 
Oregon 
Pennsylvania 
Rhode Island 
South Carolina 
South Dakota 
Tennessee
Texas 
Utah 
Vermont 
Virginia 
Washington 
Washington D.C.
West Virginia 
Wisconsin 
Wyoming

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