How to calculate
What is regular time?
Regular time refers to the typical work hours of employees, excluding additional labour hours such as overtime. Importantly, regular time refers only to non-exempt employees, who are expected to work a set number of hours per pay period and are entitled to overtime pay if those hours are exceeded. Hours worked by salaried or exempt employees are not included in regular time.
Regular time should be calculated for all employees with regular status. It's important to keep in mind that regular employees may be either full-time or part-time workers. In the US and internationally, full-time is generally considered to be 40 hours per week, although employers have some leeway when it comes to stipulating what counts as full-time and part-time hours.
Some countries have different standards for what constitutes full-time employment. In France, for example, 35 hours is considered full-time employment, with anything extra warranting overtime pay.
Also keep in mind that regular employee status is not granted to employees hired temporarily, such as seasonal workers, interns, and others. Essentially, any individual hired with the assumption of indefinite employment and who is guaranteed a specific number of hours per workweek can be considered a regular employee.
Why is regular time important?
The Department of Labour (DOL) requires U.S. companies to compensate non-exempt employees for any hours they work that exceed their regularly scheduled shifts. Failure to compensate employees for overtime hours carries consequences that vary from state to state, but at the federal level, companies are liable for penalties that can amount to as much as $1,000 per violation.
That's why calculating regular time for all non-exempt employees is so important. It's a necessary step of accounting for all the hours an employee works and ensuring that they're lawfully compensated.
How to calculate an employee's regular time
In the US, employers must abide by federal laws regarding overtime compensation as well as the laws in individual states, which vary slightly. According to federal law, employers must pay employees 1.5 times their regular rate (known as time and a half) for any hours in excess of 40 per week. Where an individual state has differing standards, employers are expected to compensate their employees according to the laws that provide greater compensation. Employers with remote employees who work internationally must abide by the standards of the country where the employee is located.
Federally, overtime is considered any time worked beyond the 40-hour-per-week standard. The DOL views regular time to include any time that an employee spends doing tasks or activities that:
Benefit the employer
The employer is aware of
The employer has not prohibited
In other words, regular time doesn't just apply to the hours an employee spends clocked in or physically at work. If they're engaged in tasks or activities that satisfy the above conditions, you must include that time in your regular time calculations. To calculate an employee's regular time, you need to:
Determine the employee's shift start and end times
Subtract start time from end time to determine the total amount of hours worked
Subtract unpaid time, such as unpaid lunch hours or other breaks
Timesheets, punch cards, and other time-tracking programs document when employees begin and end their shifts and can track unpaid lunches and breaks. Convert the time worked into decimal form if an employee doesn't work an even number of hours.
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