Retroactive overtime

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Retroactive overtime (ROT) is an additional amount of money that is awarded when an employee has a combination of overtime and an additional amount of money, such as a commission or a bonus that is guaranteed based upon work requirements. Overtime is required to qualify for retroactive overtime. So, if a salesperson receives a commission, but does not receive overtime, then the employee does not qualify for retroactive overtime.

Overtime is the amount of time someone works beyond normal working hours. The term is also used for the pay received for this time. Normal hours may be determined in several ways:

Commissions are a form of variable-pay remuneration for services rendered or products sold. Commissions are a common way to motivate and reward salespeople. Commissions can also be designed to encourage specific sales behaviors. For example, commissions may be reduced when granting large discounts. Or commissions may be increased when selling certain products the organization wants to promote. Commissions are usually implemented within the framework on a sales incentive program, which can include one or multiple commission plans.

Performance-related pay or pay for performance, not to be confused with performance-related pay rise, is a salary or wages paid system based on positioning the individual, or team, on their pay band according to how well they perform. Car salesmen or production line workers, for example, may be paid in this way, or through commission.

Contents

Computation

Retroactive overtime is computed by using the number of hours of overtime worked for the specified payroll period to look up the coefficient percentages from the coefficient table (Form WH-134). [1] This coefficient percentage is then multiplied by the commission and/or bonus to determine the ROT amount that will be awarded to the employee in addition to the already existing overtime and commission.

Payroll

A payroll is a company's list of its employees, but the term is commonly used to refer to:

The additional amount on money beyond the overtime, the commission or bonus, must be a guaranteed payment to the employee based upon specified work criteria. Here are some examples of some bonuses that qualify and do not qualify.

Qualifying bonuses

If an employee is awarded a known amount of money for working a certain shift or for working a number of consecutive weeks, that additional amount of money that is paid beyond the regular base pay and overtime will qualify for retroactive overtime if and only if there are also overtime hours paid during the same pay period of the qualifying bonus. You could also consider this to have an OT value of zero and add an additional look-up table value of all zeros for the percentages to use to determine the ROT amount.

In logic and related fields such as mathematics and philosophy, if and only if is a biconditional logical connective between statements, where either both statements are true or both are false.

Non-qualifying bonuses

If an employee is awarded a discretionary bonus that is not guaranteed based upon specific work criteria, this bonus does not qualify for retroactive overtime. A good example of this is a Christmas bonus that may be awarded to employees. This is not a guaranteed bonus that the employee will receive for meeting a specified goal but is rather a bonus that is awarded to the employee on the discretion of the company.

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Christmas is an annual festival commemorating the birth of Jesus Christ, observed on December 25 as a religious and cultural celebration among billions of people around the world. A feast central to the Christian liturgical year, it is preceded by the season of Advent or the Nativity Fast and initiates the season of Christmastide, which historically in the West lasts twelve days and culminates on Twelfth Night; in some traditions, Christmastide includes an octave. Christmas Day is a public holiday in many of the world's nations, is celebrated religiously by a majority of Christians, as well as culturally by many non-Christians, and forms an integral part of the holiday season centered around it.

See also

Effects of overtime

Employees who work overtime hours experience numerous mental, physical, and social effects. Significant effects include stress, lack of free time, poor work-life balance, and health risks. Employee performance levels could also be lowered. Long work hours could lead to tiredness, fatigue, and lack of attentiveness. As a result, suggestions have been proposed for risk mitigation.

Notes and references

  1. Coefficient Table for Computing Extra Half-Time for Overtime, Form WH-134

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