Accounting, Payroll & Pension Issues/Bi Monthly Payroll

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Question
What is considered overtime in a bi monthly payroll?   How many regular hours are in a pay period?

Answer
There is Bi-Weekly payroll (every other week) and there is Semi-Monthly Payroll (twice a month). Those are the two most frequent payroll types. The difference is the bi-weekly is paid 26 times a year and the Semi-Monthly is paid 24 times a year.

There is no overtime for Salaried exempt employees their wages are on an annual basis divided by the number of pay periods in the year.

Overtime for hourly employees is figured on a weekly basis. Even if paid with a semi-monthly payroll. There can be different hours worked for the payroll period, however, the overtime is still figured on a week.  If a partial week is worked than the payroll department or whomever is figuring time must keep track of the time worked in the first part of the week than on the next payroll add the time from the 2nd part of the week for overtime purposes. Overtime on that week is paid on the payroll following completion of the week.

Semi-Monthly is not an easy nor an accurate payroll to run for hourly employees. Bi-weekly is much more accurate and easier to process.

I used to run a semi-monthly payroll for hourly as well as salaried employees. I had to keep an excel spreadsheet of each hourly employee so I could keep the hours straight for overtime for the partial weeks.

Salaried employees are always paid for 86.66 hours which is as close to 2080 as you can come in a semi monthly payroll.

Hourly employees must be paid their exact time for each week worked. It depends on when the pay period ends how many hours they have. They always have more than 80 hours.

workweek is a fixed and regularly recurring period of 168 hours, or seven consecutive 24-hour periods.  It may begin on any day of the week and at any hour of the day.  An employee’s frequency of pay (e.g., bi-weekly, semi-monthly, monthly) has no impact on this fixed workweek.  Each workweek stands alone; averaging hours worked over two or more workweeks is not permitted by the FLSA

Here is the FLSA advisor on overtime

http://www.dol.gov/elaws/esa/flsa/otcalc/i2.asp

Shirley

Accounting, Payroll & Pension Issues

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Shirley McAllister, CPP, PHR

Expertise

I can answer payroll questions, payroll tax questions, 401K questions. No stock option questions please and I have some knowledge of other pensions but am most familiar with the 401K pension. I can answer U.S.and Canada payroll questions proficiently and have a good general knowledge of UK and South Africa and some knowledge of Australia and New Zealand Payroll procedures. Please do not ask me homework questions I do not have time to answer them.

Experience

25 years with an international company in the Human Resources, Payroll and Payroll Tax areas.

Organizations
SHRM, APA, I.O.M.A.

Publications
I.O.M.A. and BNA

Education/Credentials
P.H.R., C.P.P., Canadian Payroll Administrator, Successfully passed APA class on UK Payroll Administration. Boise State University Human Resource Certification

Awards and Honors
APA Hotline Citation of Merit for last 8 years.

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