Danny Carriero is an Application Consultant ll, specializing in Kronos Scheduler, with nearly a decade of Kronos experience.

The Fair Labor Standards Act (FLSA) requires that all non-exempt employee who works over 40 hours a week, be paid an overtime rate on those excess hours that is no less than time and a half of their regular rate. This rate calculation, though, must take into account potential complications like employees who work at multiple rates, or employees who are paid using items like commissions.

If you were to do your WAOT calculation by hand, you would use the following calculation:

  1. All hours are treated as straight time (ST) and the hours are multiplied by the ST rate of pay to determine TOTAL A.

  2. TOTAL A is then divided by the total hours worked in the week and then divided by 2 to determine RATE B.

  3. RATE B is multiplied by the number of hours over 40 to determine TOTAL C.

  4. TOTAL A plus TOTAL C = weighted average gross pay.

That's a lot of calculations for each employee, each week!

The Weighted Average Overtime functionality within Kronos WTK can be used to calculate worked time and wages for the following labor tracking requirements:

  • Defining a weighted average overtime rate for employee based on a contributing shifts rule

  • Adjusting wages for employees who work outside of their primary labor account

  • Calculating sick Leave pay for tipped and non-hourly employees to ensure they meet the minimum wage requirement

Although many organizations are relying heavily on custom interfaces and/or database/payroll hooks in conjunction with external job rate tables to meet these requirements, the Kronos WFC functionality could be leveraged to automate and maintain these calculations.

The options for configuring a WAOT pay code are as follows:

  • Pay using weighted average rate

  • This option is used specifically for overtime pay codes

  • Based on either a daily or periodic time period

  • Can be based on a contributing shift rule

  • Wages for the pay code contribute to weighted average rate

  • Selected for regular or standard pay codes, whose totals should count toward a WOAT rate

  • Include the effect of Multiplier and Add in the pay codes contribution

  • Should only be selected when the pay code has a multiplier of 1

Let's use California’s FLSA Labor standard as an example. California has a unique requirement which can be interpreted within the Kronos configuration, is defined as follows:

"Paid sick time for nonexempt employees shall be calculated by dividing the employee’s total wages, not including overtime premium pay, by the employee’s total hours worked in the full pay periods of the prior 90 days of employment."

One way to meet this interpreted requirement, would be to configure a combination of the following building blocks:

  • Contributing Shift Rule (introduced to be used in minimum wage options in v7)

  • Combined Pay Codes

  • Time or Money Pay Code

Step 1: Configure a combined pay code that contains all of the worked time pay codes that will contribute to the 90-day look-back

Step 2: Configure the Contributing Shift Rule to look back 90-days and will refer to time worked as per the pay codes included in the Combined Pay Code setup in step 1.

Step 3: Create a new time or money pay code, and configure the "Weighted Average Calculation" tab as follows:

Check the box for: "Pay using weighted average rate"

Choose the CSR option below and select the CSR configured in step 2

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