Few things can sink a project as fast as unchecked overtime. But before you can start managing your overtime, you need to know how to calculate it. This guide will help you learn:

Let’s start with how to calculate overtime. 

How Is Overtime Calculated for Construction Workers?

For construction workers, every hour over the standard 40-hour workweek must be paid as time and a half. Luckily, the calculation is pretty simple. 

1

Calculate the Employee’s Overtime Rate An employee’s overtime rate is 1.5 times their hourly wage. If an employee is working at $20 an hour, their overtime rate would be $20 x 1.5 = $30.
(Hourly Wage) x 1.5 = (Overtime Rate)

2

Determine How Many Hours They Worked Overtime Any hour over 40 will be considered overtime. If an employee worked 55 hours, their overtime hours would be 55 – 40 = 15.(Total Hours Worked) – 40 = (Overtime Hours)

3

Calculate Their Overtime Pay An employee’s overtime pay will be the overtime hours they worked multiplied by their overtime rate. If an employee’s overtime rate is $30 and they worked 15 hours overtime, their overtime pay is $30 x 15 = $450.
(Overtime Rate) x (Overtime Hours) = (Overtime Pay)

Of course, that’s not all this employee would be making. They would also be making their standard wage ($20 x 40 hours = $800). Their full wage for the week would be $1,250.

Some employees are exempt from overtime. Salaried employees, such as administrative personnel, are considered exempt if they make more than $47,476 a year. Independent contractors do not qualify for overtime pay.

Does Overtime Apply to All Construction Companies?

Small businesses that do not conduct interstate activities are not required by federal law to pay their employees overtime—however, state laws may vary. A small business is defined as a business that has less than $500,000 in annual revenue. 

State Rules for Overtime: Is Overtime 40+ Hours a Week or 8+ Hours a Day?

For the most part, individual states follow federal law—overtime is paid after 40 hours a workweek. But there are some exceptions, outlined below. When state law conflicts with federal law, the decision is always made based on what is better for the employees.

Alaska
Overtime is over 40 hours in a week or more than eight hours a day.
California
Overtime is over 40 hours a week, over eight hours a day, or over six days in a workweek. 
Employees must be paid double time if they have worked over 12 hours in a single day or have worked eight hours on the seventh consecutive day of a single workweek.
Colorado
Overtime is over 40 hours in a week, 12 hours in a workday, or over 12 consecutive hours.
Kansas
Overtime is over 46 hours in a week unless the employee is covered by the FLSA.
Maryland
Overtime is governed by federal law, but there are some exceptions for specific professions.
Michigan
Overtime applies to employers with two or more employees.
Minnesota
Overtime is over 48 hours in a week unless the employee is covered by the FLSA.
Nevada
Overtime is over 40 hours in a week or eight hours in a 24-hour period if the employee makes less than 1.5 times the minimum hourly wage.
New York
Overtime may be applied to employees who would otherwise be exempt under federal law. Further, overtime pay must be at a rate of 1.5 times minimum wage for these otherwise exempt employees.
Pennsylvania
Overtime is governed by federal law, but some federally exempt employees may be included.
Vermont
Overtime applies to employers with two or more employees.
Virginia
Overtime may be applied to employees who would otherwise be exempt under federal law. Further, there are harsher penalties for those who do not pay overtime correctly.
Washington
Double pay may be required for overtime on public works projects. Overtime cannot be mandated for registered or licensed practical nurses.
West Virginia
Overtime is governed by federal law but can also be applied to businesses that meet the following three criteria: the business cannot apply for federal “enterprise” coverage; 80 percent of the company’s employees are exempt due to interstate commerce activity; the business has six non-exempt employees working at a permanent location.

If you’re not clear about your state’s overtime laws, you should talk to a payroll specialist—they’ll be able to point you in the right direction.

Reduce Overtime for Construction Workers With Workyard

Calculating overtime is easy, but actually tracking overtime hours across your crew can be a challenge. If you’re still tracking everything through pen-and-paper, text messages, or emails, you need a better system. Workyard can help.

Automatically Calculate Overtime Hours
Employee time is tracked within the Workyard app. Any hours over 40 will be automatically classified as “overtime.” With Workyard, you can easily see which of your employees are about to exceed 40 hours, so you can assign tasks to other employees.
Ensure Your Overtime Hours Are Correct
Through GPS technology, Workyard determines where your employees are and whether they’re on-site. You can easily pull overtime reports, but you can also bill them out by project.
Improve Your Scheduling Process
Workyard makes it easier to distribute schedules to your team, which can reduce administrative time and cut down on the number of hours employees need to spend managing their schedules.
Export Overtime Directly to Your Payroll Software
Workyard supports technology such as Foundation, ADP, and QuickBooks to help you automate your payroll. Payroll automation reduces the amount of time you spend on your payroll management while also reducing the potential for mistakes like overpaying.

Workyard can help you manage, calculate, and reduce overtime for construction workers. If you want to improve your overtime management and your project efficiency, sign up for a free trial of Workyard today or call us at (650) 332-8623.

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