Regular and Overtime Labor Costs

DPS uses both regular and overtime hours entered on employees' timesheets to compute labor charges for each employee and the projects on which he or she works.

During normal operations, all hours that an employee works are recorded on a timesheet. Generally, an employee's regular hours are the total hours that an employee is expected to work in a pay period (for example, 40 hours per week). An employee's overtime hours are any hours worked in excess of the regular hours for the period.

You can record regular hours and overtime hours separately.

DPS follows these steps to compute the monetary labor amount costed to all projects, phases, and tasks on which an employee works:

Labor Amount = (Job Cost Rate * Reg Hours) + (Job Cost Rate * Ovt Percent * Ovt Hours)

Note that the job cost rate in the above equation is the hourly job cost rate entered for the employee in the Employees hub, or the employee's salaried rate divided by the number of hours charged in the current payroll period.

Regular Cost Calculation

DPS calculates labor costs for regular hours by multiplying the number of regular hours on an employee’s timesheet by the employee’s job cost rate (as defined in the Employees hub).

If you enter a salaried job cost rate for an employee, DPS calculates labor costs for regular hours by dividing the salaried amount per payroll period by the number of regular hours that the employee reports for the current payroll period.

Overtime Cost Calculation

You may want to pass on the added cost of overtime hours to your projects. DPS calculates overtime job cost rates based on the information that you enter for each employee in the Employees hub. DPS calculates overtime costs for an employee with an hourly job cost rate differently than it does for an employee with a salaried job cost rate.

• Employees with an Hourly Rate: If you enter an hourly rate as the job cost rate for an employee, DPS calculates the overtime job cost for the employee using the following formula:

  Overtime Job Cost = Ovt Hours * Job Cost Rate * Ovt Percentage

• Employees with a Salaried Rate: If you enter a salaried amount per payroll period as the job cost rate for an employee, DPS begins calculating the overtime job cost for the employee by calculating the employee’s annualized hourly rate. DPS calculates the annualized hourly rate using the following formula:

  Annualized Hourly Rate = Annual Salary / Estimated Annual Regular Hours

  (Estimated Annual Regular Hours = Hours per Week * 52 Weeks)

  DPS then uses this annualized hourly rate as the hourly job cost rate when it calculates the employee’s overtime costs. DPS calculates the employee’s overtime job cost using the following formula:

  Overtime Job Cost = Annualized Hourly Rate * Ovt Percentage

You can use both a standard overtime rate (Ovt 1) and a secondary overtime rate (Ovt 2). DPS calculates each overtime rate separately. Secondary overtime is overtime that is costed and paid at a different rate than standard overtime. Typically, standard overtime is costed and paid at 150% (time-and-a-half) of regular pay. Secondary overtime is used for special circumstances that require overtime to be costed and paid at a rate other than 150%.