Calculating Overtime

Workers’ Comp Overtime Definition

Overtime means those hours worked for which there is an increase in the rate of pay:

  • For work in any day or in any week in excess of the number of hours normally worked, or
  • For hours worked in excess of 8 hours in any day or 40 hours in any week, or
  • For work on Saturdays, Sundays or holidays.

NOTE: Forms of incentive pay commonly referred to as "shift differential" or "premium pay" associated with working other than normal day shift hours during the standard workweek are not to be considered overtime.

In the case of guaranteed wage agreements, overtime means only those hours worked in excess of the number specified in such agreement.

Exclusion of Overtime Payroll

Exclusion of Overtime Payroll means: The extra pay (that amount over and above the regular straight time pay) for overtime shall be excluded from the payroll on which premium is computed - as shown below - as long as payroll records are kept to show overtime pay separately, by employee and in summary by classification.

  • If the records show separately the extra pay earned for overtime, the entire extra pay shall be excluded.
  • If the records show the total pay earned for overtime (regular pay plus overtime pay) in one combination amount, 1/3 of this total pay shall be excluded. If double time is paid for overtime and the total pay for such overtime is recorded separately, 1/2 of the total pay for double time shall be excluded.

In simple terms, if you keep adequate records of overtime, you are only required to pay workers' compensation premium on the straight time payrolls. If adequate records are not maintained, the overtime pay cannot be excluded from the total payroll and you must pay on the entire amount.