 In this presentation, we will take a look at overtime calculations. We're first going to look at a time calculation to consider the fraction of hours. Time seems like a fairly straightforward thing to calculate. However, because it's based on 60 minutes in an hour, we have to have that conversion in order to do many types of calculations. In other words, our rates in payroll are usually not in terms of rate per minute. They're typically in terms of rate per hour, and therefore any types of minutes, if we have fractions of hours, we have to convert them from minutes to fractions of hours. So to do that, if we have an employee that worked 45 minutes, for example, if we had the 45 minutes, we divide that by the number of minutes in an hour, 60. The 45 divided by 60 would give us the percent of your time, which would be 75. That would be the percent of an hour. So it's 0.75 of an hour. Now, this, of course, is important because when we have a rate, we don't want to take our hourly rate and multiply it by 45 minutes. That won't work. We have to multiply it by 0.75 hours. Now, if we're considering overtime rates, then typically we think of overtime, the normal overtime rate would be time and a half, time and a half. Now, when we consider time and a half, we have to consider what that means. So if we're saying that we pay someone $10 an hour times time and a half, we could calculate what that is. It's basically a 50% increase in overtime. You can think of you got a 50% raise. So you could calculate that times 0.5, another 50%, and that would be $5 plus the $10. So that would be $15, time and a half. The other way you can think of it, of course, if you have the $10 times 100%, which would be 100% or 1, and then another 50%, which would be 50, so 150%, or 1.5, or time, 1.5, 1.5, 150%, if we move the decimal two places to the right, that gives us our $15. So time and a half, 150% of the original pay rate, that's what we're going to get typically. That's the typical overtime calculation. Other rules can apply to overtime in that the federal law basically means that we can't go over the 40 hours, anything over 40 hours, in other words, would typically be considered overtime if the employee is subject to overtime wages. However, many states also imply or impose a law that says that anything over eight hours in a day needs to be paid overtime wages. And let's just consider that rule eight hours in a day, so that we can see how overtime might be thought of. It's pretty straightforward to look at it in any individual case. But again, if we start to accumulate a lot of data, this starts to get more and more complex. So for example, in Monday, if we had hours worked, 7.5 hours worked in the day, then we're just going to say 7.45 hours is all regular hours, and there's no overtime, because we're not over eight hours. Tuesday, if we're saying that they worked 8.5 hours, which would be eight hours and 30 minutes, if we convert, you know, 0.5 to how many minutes, 30 minutes, we're going to say that that's eight hours of regular pay, and 0.5 hours, 30 minutes of overtime that would have to be paid at the overtime rate. Then if we had Wednesday, we're saying nine hours, that of course would be eight hours of regular pay, and then one hour of overtime. Thursday, we're saying eight hours, all of it's going to be regular pay, no overtime. We got Friday, we worked total of 9.5 hours, according to the time sheet, we're going to say eight hours of it is regular, 9.5 minus 8 would be the 1.5. So that would be the totals here then, the 7.5 plus the 8.5 plus the 9 plus the 8 plus the 9.5 gives us 42.5. We know that the regular pay is the 7.5 plus the 8 plus the 8 plus the 8 plus the 8, 39.5, and then the overtime is the 0.5 plus the 1 plus the 1.5 or three hours. We can calculate that in two ways, we can of course take the 0.5 0.5 plus the 1 plus the 1.5 for the three, or we can take the 42.8 minus the 39.5, meaning this is our total hours, this is our regular hours, these then will be our overtime, or in other words, the regular hours, 39.5 regular hours plus the 3.0 t hours overtime gives us our total hours of 42. Now again, we're applying an eight rule a day type of limit here, anything over eight hours a day would have to be paid time and a half, that's our assumption. If on the other hand, we're just talking about a 40 hour work week, meaning anything over 40 hours would be overtime, then we would just take the 42.5 0.5 minus 40 to get 2.5. So you just got to be aware of what the overtime regulations could be, it could be on a weekly basis, where we would take the total per week, subtract it from the whatever requirement would be, and in this case, 40 to give us the 2.5 overtime, or if we have some type of daily requirement, whatever that daily requirement is, and it can be, note that companies do have a decision if they want to pay overtime as well, so they have to comply with the minimum regulations, which would be federal regulations, and typically the state regulations being some type of higher limit, and then they can apply whatever they want in order to incentivize people to work overtime, and so it could be whatever the overtime law is, so just know the theory of it, and then be able to apply whatever it may be, it might be a weekly rate, which can be nice, because some people would prefer, and you can give options if you are an employer, and you have something like a 40 hour weekly rate, and then anything over that would be overtime, because then you can tell people, well, how about you only work a few, like less days a week, four days a week, at a higher number of hours, more than eight hours a day, and you'd get to that same 40 hours, whereas, so if you work four days a week for like 10 hours a day, then instead of five days a week, you can get a whole another day off, and put four days at 10 hours, many employees might like that better, even if they don't get to pay the overtime, so note that a daily limit, while it could help people to not be working too many hours a day in an individual day, it can have some detriments as well, by basically preventing employees from possibly having options to work different type of pay schedules that they would enjoy working, so there's pros and cons, whatever the payment structure is, note how to put that in place, note that the daily method is a little bit more complex as well, it's not that hard in any individual day of course, but as we start to compile data for long periods of time for an individual employee, and long periods of time for multiple employees, it could start to be more complex. Next we want to look at a standard type of rounding system, note that if we're paying someone hourly, typically they're going to be logging in and out of the system, and the system will just time stamp whatever they log in and out of it, so if we have a digital system or some type of time clock, we can imagine the old time clock will they punch in, or if we have a time clock that's online, then we check in and out, clearly it's not going to be exactly on the hour, so if we, if we for example go in at 9.03 a.m. and punch out at 1.05 p.m., well what do we do with those minutes? Typically we're going to round to like a 15 minute type of estimate, so every 15 minute type of estimate because that'll make it nice and clean for us to do our payroll calculations, so here it basically around 9 to around 1 would be 4 hours, right, 9, 10, 11, 12, 1, and then if we are going back from lunch at 1.30 about 1.29, 1.30, and then we leave at 5.25, then again this is close to, if we round this up to 1.30, and this is going to be close to 5.30, so we are typically going to say that that's going to be 1.30 to 5.30, and therefore 4 hours. Now again different companies might have different types of conventions, and you could argue well that if this is the case people have an incentive to come in, you know, a few, a few minutes late, or leave a few minutes early, but typically if we're talking about a few minutes it's not going to affect behavior too much, and therefore that's typically going to be the rounding type of convention we can use in our time sheets when calculating number, amount of time at the end of the time period in order to calculate our payroll.