Conducting payroll, and paying employees correctly is critical to your business operations. Paying employees too much can negatively impact business profits while paying them not enough leaves employees frustrated and unmotivated. If companies fail to pay their employees correctly, they could even find themselves in legal trouble. For this reason, it is crucial to accurately set up overtime and payroll settings.
When employees work overnight shifts, the process becomes more complicated. Managers may find themselves with questions, such as is the employee entitled to overtime or if it was added correctly. As payroll approaches, managers may have to manually edit their time sheets to ensure they are accurate.
In this article, we will go over the simple way you can set your time clock settings for overnight employees so you can eliminate any concern of paying them incorrectly.
The article will cover the following:
Step 1: Setting Your Overtime & Pay Rules Settings
The first step to accurately paying your overnight employees is to make sure your Overtime & Pay Rules settings are set up correctly and comply with both your company's and country's overtime policies.
Under this tab, you can customize overtime and pay rules to meet your business's needs. Set up the rule type, either Overtime or an Additional hourly rate, and add specific conditions for daily, weekly, or hourly overtime. Simply set the desired settings and be sure to save changes. To learn more about the different overtime & pay rules settings click here.
Follow these steps to set the Overtime and Pay Rules:
Navigate to the Time Clock > enter settings > click on Overtime & Pay Rules tab.
Name your rule and add a code if needed. For example, for overnight shifts, you could name the rule 'Night Shifts'.
Next, select the rule that best fits your company's needs:
For overtime set the multiplier that the employee's base wage should be multiplied by.
For additional hours, add the amount per hour that should be added to the employee's base wage.
Add the condition for when the overtime or pay rules apply. For overnight shifts, we recommend you add the condition 'Partial Day.' This will allow you to select specific days and hours for the rule to apply, such as Monday through Friday between 9:00 PM and 6:00 AM.
Step 2: Adjusting Your Payroll Settings
Now it's time to make sure that the hours of overnight shifts are calculated correctly. Here at Connecteam, we allow you to allocate all the hours to the day the shift started, rather than dividing them between the two days.
Let's look at an example: Let's say I pay my employees daily overtime after 8 hours. I have an employee who works an overnight shift of 10 hours between Sunday and Monday and therefore is entitled to two hours of overtime pay. If on the employee's timesheet the shift is split between Sunday and Monday he won't receive any overtime pay because neither day accumulates to more than 8 hours. If all the hours are counted as "Sundays shift" however the employee will be paid correctly with 8 hours of regular pay and 2 hours of overtime pay.
Now let's set this up! Navigate to the Time Clock > enter the Time Clock settings > click on Payroll > check the 'Overnight shifts total hours will be assigned to the day the shift started' > save changes. That's it, you've set everything up!
How Does Overtime for Overnight Shifts Look on The Admin Timesheets?
When shifts extend across multiple days, they'll be marked in your timesheets with an indicator. Take a look at how this looks below.
The total hours for an overnight shift will be assigned to the day the shift began. For the following day, you'll see an indicator showing this was part of an overnight shift. Any overtime hours will be highlighted in red for easy tracking.
In the Hour Breakdown section on the right, you can view a detailed breakdown of hours according to the overtime policies and pay rules you have set up.
By hovering over an employee overtime you can see exactly which conditions caused the employee to enter overtime.
If you need to edit the shift hours, you can do so by simply clicking on the start or end time and changing them accordingly. You can also delete a row by clicking on the trashcan to the right of the shift.
Additional Resources
If you want to learn more about overtime and payroll check out some of the articles below:
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