California Payroll / Time Tracking Advice Needed…

[ChrisAnthony]

What is the name of your state (only U.S. law)?
California

Hello Everyone,

First, let me apologize for the lengthy post. I was just hired by a small California construction company for an IT/Office clerk position and have been tasked with finding a system to help us streamline our business operations when it comes to payroll. I’m hoping that I can lay out all the information I know in regards to our business and payroll and someone can help point me in the right direction of a solution.

From what I understand, our company filed a 511 with the EDD which allows us to have an alternative workweek of 10-hour days. This means our pay structure is as follows:

10 hours: Regular Time
10-12 Hours: Overtime
12+ Hours: Double Time
40+ Hours a week: Overtime

Entering time manually into QuickBooks works find for most of our employees, but we have several employees with multiple wage rates which really throws a wrench into the system. For example:

Let’s say one of our construction employees has an hourly rate of $20/hr. This same employee also does sales, which is a commission only position ($0/hr. + Commission). This makes trying to figure out the employees pay a bit tricky when it comes to overtime since any overtime acquired when this employee is doing sales would end up being 1.5 x $0/hr.

Our current solution is to adjust the hours/overtime ratio of the previous day to cover the overtime acquired during sales hours that fell into either the 10+ daily or 40+ weekly overtime limit. This makes for quite a bit of manual factoring and data entry that I feel should either be able to be automated or eliminated.

First and foremost, is this the correct way of handling overtime for employees with multiple pay rates? If not, can someone please point me in the right direction on how to handle this scenario?

Any advice would be greatly appreciated.

Thanks!

 

[cbg]

I take it your payroll is done in-house and not by a payroll service such as Paychex or (God help you) ADP?

 

[Zigner]

Did you have a legal question? This is not a software/PR/HR solution referral service.

 

[FlyingRon]

You have to pay non-exempt commissioned employees at least the MINIMUM WAGE. The overtime would be computed based on that.

Rather than thinking they are getting 1.5x0, the need to get 1.5x10.50 (15.75). If they have more commissions than the minimum wage, then they get the commission amount. If they have less, they get the minimum wage for the hours worked (plus overtime).

An outside salesman may, however, be considered exempt from the wage and hour law (provided they work more than half their time away from the employer's place of business and their job is making sales for goods or services). In this case, there's no obligation to pay overtime at all. If they do other things (like delivering goods, etc...) you will have to divide up the work between exempt and non-exempt categories.