How does incentive pay impact OT calculations?

jalder

Due to a resignation and FMLA absenses, we are considering offering a monetary incentive ($x.xx per hour more) to our RNs who are willing to cover the evening and weekend shifts until we are able to hire a replacement. How would that impact OT calculations? We pay OT for hours worked over 40 in a week rather than 8 in a day. Thanks for your help

Down_the_Middle

We offer our nrsg staff this type of premium pay as incentive (from time to time)and include the value of this pay in their overtime. Even if the actual payment of the incentive is deferred (e.g. payable at the end of a 2 mo period); it is factored into O/T calc's at the time it's earned.

pork1

I believe you must take the $0llars and add it into your weekly total paid for 40 hours, which will give you rate of pay per hour worked at 40 hours. Divide this amount by the 40 hours and now you have the rate of pay per hour worked up to 40. You then use this new rate of pay to calculate the O/T hours worked.

That is how we do it, but we are not in the nursing business, however, I believe that would satisfy the FLSA.

It is for this reason that we have now gone away from hourly bonuses and put it into base wages and the computer then calculates the check to be cut. I do not recommend an incentive bonus, for your purposes. You might consider the "premium pay" of $1.00 or any $ amount for these hours worked for night shifts and week-ends. This would bump up the value for the hours worked after 5 PM and before 5 AM or even 7AM.

Your issue can be done, it just becomes a night mare for management and concerns for calculations out of the ordinary. Check and recheck is our watch word!

PORK

Shadowfax

The simple answer is it affects the o/t rate for the pay period in which the incentive is earned. While it may be true that the calculation is simpler if you put it in the base, since you are doing it on a temporary basis until you are back to full staff, I'd do it just as you suggest - that way you will have no difficulty retiring the pay when you are running 100%.