Timesheet Weighted Average Overtime Setup

Organizations often pay differing amounts for shift differentials, combined with different hours assigned to them. This can make calculating the correct ‘blended’ rates a challenge. Microix software correctly addresses these challenges.

This article, published from the US Dept of Labor, provides insight on how to properly calculate Overtime, using Weighted Average.

Setting Up Weighted Average Overtime

To demonstrate more details of how the Weighted Average OT works, we will show numerous screens below, to set up, and use, Weighted Average OT.

GIVEN that an employee of Hospital worked 42.94 hours at regular wages ($10.00 / hr.), 15 hours at a Evening Shift differential rate (additional $1.00 / hr.), and 5.94 hours at a Night Shift differential rate (additional $2.00 / hr.). We will demonstrate how the 2.94 hours of Weighted Average OT is calculated.

Step 1. Setup new MIP Earning Codes - Setup of differing Shift Differential Codes / Rates

In MIP, set up the different Shift Differential Codes & Rates, by setting up each different & unique Rate. If your organization needs 5 differing rates, then 5 new MIP Earning Codes will need to be established.

Set Up of Rate #1 - MIP Earning Code - Shift Differential Evening

Set Up of Rate #2 - MIP Earning Code Shift Differential Night

Step 2.  In Microix>Timesheet>Setup>Shift Rules, Setup an appropriate 'Regular' shift. More details on establishing Shifts can be found on the Shift Code Tab. However, in               order for the Shift Differential feature to work properly, note the following settings (1-4) that must be configured. Under the Shift Differential section, click on the               Green Add button, to select the codes set in Step 1 (MIP) above. Then click on the GREY wrench (note #4) in order to configure each Shift Differential.

Clicking on the GREY wrench will bring up the following screen. This is where each Shift Differential is defined as to its Begin Time and End Time. Select the Earning Code (set up in Step 1 - MIP) where the earnings will be linked to. Select the appropriate days, for each code.

Special Note: Regarding Grace Period (In minutes) - The purpose of the Grace Period is to allow for employees to punch in/out, early or late and qualify for the SD rate.

For example, if you set this to 10 minutes, and a employee punches in early by 10 min (or less) the early/late minutes will be paid at the SD rate.

HOWEVER, this only works if NO TWO shift times immediately precede, or follow, another shift. When multiple shifts immediately precede/follow another shift, this Grace Period MUST be set to zero (0).

Step 3. In Microix>Timesheet>Setup>Overtime Rules, Set up Weighted Average Overtime Rule.

Step 4. InMicroix>Timesheet>Setup>Employee Default Values, Configure each employee to correct shift (Regular) & correct OT rule (OT WA), established in Step 3 above.

This completes the setup of Weighted Average Overtime.

Next, we will review Anna Belle's timesheet. Lets presume that Anna Belle worked Monday through Wednesday, from 3 PM to midnight, and then from 8 AM to 5 PM, with a one hour lunch break, on Thursday & Friday. Her timesheet would reflect as below:

Her timesheet generated above, in Microix, accurately reflects the 5 hours (M-W) that fell within the Evening Shift Differential, and the 1.98 hours of Night Shift, for each day. Her regular total hours of 42.94, reflect her 3 days at 8.98 / day, and 2 days at 8 / day. Also broken out, are the 2.94 of a 'blended' (two differing shifts of evening & night) hours. Once approved by her supervisors and transferred into MIP, the timesheet in MIP is reflected below. This is the timesheet before calculating payroll.

Shown below is the Calculated payroll in MIP, showing all the correct wages.

To verify independently how the 'weighted average', is calculated, see the spreadsheet below. The blended rate agrees, with the Microix / MIP rates above.