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Soni Consulting
Harshal Soni

3 Rules to calculate Overtime

6KDUH

One of the most common business requirement that I came across at any client was calculation of
Overtime In the US, different states have different overtime rules.
There are 3 main types of Overtime rules
Overtime by working overX number of hours per day
Overtime by working overX number of hours per week
Overtime by working overX number of consecutive days
US States

OT over
working 8
HR in a day

OT over
working 10
HR in a day

OT over
working 12
HR in a day

OT over
working 40
HR in a week

OT for
working over
5 Consecutive
Days

Alaska

California

Colorado

Nevada

Puerto Rico

Virgin Island

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Kentucky

Other States

In this article, we will talk about the simplest rule Overtime by working over x number of hours per
week. In US (most of the states) the standard rule that when an employee works over 40 hours in a
work-week, they are entitled to Overtime to be paid at one-and-half (1.5x) times.
In Time Evaluation, we create 3 rules that will help us generate Overtime for such case.
First, we will create a few times types that we will use for calculating Overtime.

In Time Type ZH01 we will hold the number of hours worked on a daily basis.
In Time Type ZH02 we will hold the number of hours worked on a weekly basis but not exceeding 40
hrs (weekly threshold).

Rule 1: ZOT1

Rule ZOT1 will process as follows:

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If the current day being processed is the first day of the Work Week, then we initialize the Time Type
ZH02 to 0 (Zero).
If the current day being processed is not the first day of the Work Week, then read the previous days
value of Time Type ZH02 (HRS=LZH02) and store the value into current days ZH02 value
(ADDDBZH02Z)

Rule ZOT2:

In Rule ZOT2, we look at the time pair and see if these time pairs are generated through Clock-Time
Events (IT2011) or through Attendance Infotype (IT2002). In either case, we read the number of
hours from the Time Pairs and store them into Time Type ZH01 and ZH02.
Here we assume that all the attendance and Time Pairs are to be considered for Overtime
Calculations. If you have to use only certain attendances, then the rule will need to account for that.
With this rule, we accumulate total number of hours worked in a week as well as the number of
hours worked on a daily basis.

Rule ZOT3:
Rule ZOT3 will check the hours in ZH02 and check against the weekly threshold of 40 hours and
determine if Overtime needs to be generated.
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In the rule, we read the value of ZH02 on a daily basis and then determine if the value has exceeded
40 hours. If the value of ZH02 is less than 40 hours on the day being evaluated then we have
nothing to process. However, if the value of ZH02 exceeds 40 hours, then we generate the Wage
Type for all hours over 40 hours and set the ZH02 value to 40 hours.
In the above rule, the step ADDZL 9100 will create the Wage-type 9100 which is Overtime at 1.5x

We bring all these rules in out schema as follows:

Run this scheme for your employees and you will see overtime generated for any employee who
records more then 40 hours of Time Events of any attendances.
Special Note: This rule does not account for any special case when we have Holiday and the employee
works overtime in that week. Also all Absences, paid or unpaid, are ignored in OT calculation hours. If you
have special requirements, then this rule needs to be tweaked to incorporate the business requirement.

July 2011

Harshal Soni

Posted in Time Evaluation

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