Skip to content
  • There are no suggestions because the search field is empty.

What is the Overtime Adjustments in Protiv? 🤔

This article explains how Protiv calculates overtime adjustment when bonuses are involved, ensuring compliance with the Fair Labor Standards Act (FLSA) within the United States of America. ⚖️

When you give your workers non-discretionary bonuses, the Fair Labor Standards Act (FLSA) requires you to adjust their overtime rates. Don't worry, Protiv's got your back! We automatically calculate these adjustments for you. 💪


Why the Adjustment? 🧮

The FLSA mandates that overtime pay be calculated based on the employee's regular rate of pay, which includes bonuses. This means that if an employee earns a bonus, their overtime rate needs to be recalculated to reflect the increased hourly earnings.


How Protiv Calculates OT adjustment 🤖

Protiv automatically calculates the OT (Overtime) Difference for you, ensuring you remain compliant with the FLSA. Here's how it works:

  1. Bonus Rate per Hour: The bonus amount is divided by the total number of hours worked (regular and overtime) to determine the bonus rate per hour.

  2. Calculate additional per hr OT: We then multiply the bonus rate by .5 to determine the additional overtime premium per hour. 

  3. Calculate total OT adjustment: Multiply the new premium per hour rate by the total overtime for the week. 

  4.  

Example:

Let's say your employee earns $20/hour and works 50 hours in a week (10 of which are overtime). They also receive a $200 bonus. Protiv would calculate the OT difference as follows:

  1. Bonus Rate per Hour: $200 / 50 hours = $4.00

  2. Adjusted Regular Rate: $4 x  .5 = $2

  3. Adjusted OT Rate: $42 x 10 = $20.00 


Turning Off Automatic OT Adjustments Calculation 📴

If you prefer to calculate the OT adjustments yourself, you can turn off Protiv's automatic calculation:

  1. Go to Settings > Payroll

  2. Scroll to State & Country Overtime Settings

  3. Toggle off the "Add Overtime Adjustment from Bonuses" option.


Important Note: This information is specific to U.S. companies and the Fair Labor Standards Act (FLSA). Some of the same rules apply to certain Canadian provinces. Overtime laws vary by location, so always consult with an HR professional or legal expert to ensure compliance with your local regulations.

 

📚 TOOLS & RESOURCES:


  1. U.S. Department of Labor: Fact Sheet #56C: Bonuses under the Fair Labor Standards Act (FLSA)