PTO and Overtime Pay

Jayhawk

We have a situation where an hourly, non-exempt employee worked her regular 40 hour week, Mon-Fri. However, on Mon of that week, on her timsheet, she had taken 2.5 hours of PTO time. Normally we would pay her for 40 hours. Our question is, though, on Sat. of that same pay period, she worked an additional 4 hours.

She claims that she is entitled to 4 hours of overtime pay and the PTO time of 2.5 hours does not get deducted from the qualifying 40 hours to be eligible for overtime pay. Our payroll department says that it does and she is only eligible for 1.5 hours of overtime pay and 40 hours of reg pay and then 2.5 hours of reg PTO pay.

Can someone help me? It would be greatly appreciated!

Jayhawk

Ok. I think I may have found my answer but still appreciate some insight on this. It looks like overtime applies only after 40 hours of actual work, not hours paid, such as vacation days, PTO, etc.

John Vering MO

Overtime pay is based on hours actually worked.
John Vering Mo. co-editor

ritamcguire

What if the employee worked 40 hours and also wanted the 2.5 hours of PTO. Would you then have to compute that PTO at the overtime rate?

This situation actually comes up in our company. We give 8 hours of PTO (the equivalent of one day of work) for three months of perfect attendance. It is common for employees to ask for their 8 hours of PTO in addition to their normal work week. We equate the PTO day to a vacation day and treat it the same way for payroll purposes, i.e., the PTO day has no bearing on OT in the same manner that a vacation day would have no bearing on OT. Your thoughts!

Hatchetman

Unless your policy or a contract requires that POO be calculated in the determination of oovertime, you don't pay overtime on that basis.

I am confused though about the employee who work the all of the 40-hour week and then put in for 2.5 hour PTO for that week. And yo paid him the PTO? In essence, what you are doing is just paying cash for the awarded PTO since it isin't be used to cover an absence. Is that what your company really wants to do? Make it easier on yourself: at th etime of awarding the PTO, ask the emplyee if he or she would rather have the equivalent cash at that point, instead of the PTO. The payment would be counted in the calculated of any overtime pay (but not for counting toward the overtime hours).