How to Configure Overtime Rules for Shifts

Some organizations pay overtime based on daily hours (e.g., overtime applies after 8 hours in a single day). Others calculate overtime on a per-shift basis.

With shift-based overtime, the overtime threshold depends on the scheduled shift length. For example:

• If a worker has an 8-hour shift on Monday, any hours beyond 8 will be overtime.
• If the same worker has a 10-hour shift on Tuesday, overtime will only apply after 10 hours.
• A second shift worked on the same day resets the overtime calculation from the first shift.

You can enable shift-based overtime in the Pay Class settings:

Step 1: Go to the Fareclock Admin Console and go to Settings. Under ‘Settings’ find and click ‘Payroll’.

Step 2: Click the ‘Pay Classes’ tab above.

Step 3: To create a new pay class, click on ‘+ Add Pay Class’.

Step 4: Under “Overtime Settings,” adjust the options to match your organization’s requirements.

You’ll want to select “Overtime by Shift” instead of “Overtime by Day.”

When calculating overtime by shift, there are two options:

1.Sum of hours worked per shift – Overtime applies when total hours worked exceed the scheduled shift duration.

• Example: If a shift is scheduled from 9:00 am–5:00 pm (8 hours), and the worker is present from 9:15 am–6:00 pm, overtime will apply from 5:15 pm–6:00 pm.

2. All work outside fixed shift times – Overtime applies to all hours worked outside the scheduled shift times.

• Example: Using the same shift, overtime will apply from 5:00 pm–6:00 pm since the scheduled shift ended at 5:00 pm. In some regions, this is called “undertime,” as overtime is given even if the worker started late.

If you are using a flexible shift class, either option will treat any hours worked beyond the normal shift length as overtime.

For more details:

• Pay Class setup: How to Setup Salary Calculation
• Shift Setup: Shift Scheduling Guide

Note that Shift-based overtime requires that the shift configuration allows lock-out periods outside the normal start and end times.