Pay Rules Configuration

Learn how to configure pay rates, overtime rules, and labor cost tracking in the Shifts platform to ensure accurate compensation calculation and budget management.

Overview

The Pay Rules Configuration feature allows administrators to set up how employees are compensated for their work, including hourly rates, overtime eligibility, and special pay conditions. Proper configuration of these rules ensures accurate labor cost tracking and payroll calculation. This article explains how to configure pay rules and manage labor costs across your organization.

Accessing Pay Configuration

To access pay rules configuration:

1. Log in with an administrator account
2. Navigate to Admin > Business Setup
3. Select Pay Rules from the menu
4. The Pay Rules configuration page will display

From this page, you can configure both business-wide settings and individual employee pay rates.

Business-Wide Pay Settings

These settings apply to your entire organization:

Overtime Rules

1. Navigate to Admin > Business Setup > Pay Rules > Overtime Settings
2. Configure overtime thresholds:
   • Weekly Overtime Threshold: Hours per week after which overtime applies (typically 40)
   • Daily Overtime Threshold: Hours per day after which overtime applies (typically 8)
3. Set multiplier rates:
   • Overtime Multiplier: Rate multiplier for overtime hours (typically 1.5)
   • Double Time Multiplier: Rate multiplier for double time hours (typically 2.0)
   • Double Time Threshold: Hours after which double time applies, if used
4. Choose calculation method:
   • Weekly Only: Apply overtime only based on weekly hours
   • Daily and Weekly: Apply overtime based on both daily and weekly thresholds
   • California Rules: Special rules for California employers (daily overtime plus double time)
5. Click Save Settings

Rest Period Settings

To configure work limits and required rest periods:

1. Navigate to Admin > Business Setup > Pay Rules > Rest Periods
2. Configure work limits:
   • Maximum Daily Hours: Maximum hours an employee can work in one day
   • Maximum Weekly Hours: Maximum hours an employee can work in one week
   • Minimum Rest Period: Required hours of rest between shifts
3. Set enforcement level:
   • Warning Only: System warns but allows violations
   • Require Override: Manager must approve exceptions
   • Strict Enforcement: System prevents scheduling that violates rules
4. Click Save Settings

Individual Pay Rate Configuration

To set employee pay rates:

1. Navigate to Admin > Employee Management
2. Find and select the employee to configure
3. Click the Employment Details tab
4. In the Compensation section, set:
   • Hourly Rate: The employee’s base pay rate
   • Overtime Eligible: Enable/disable overtime eligibility
   • Special Pay Rules: Any custom rules that apply to this employee
5. Click Save Changes

You can also bulk update pay rates:

1. Navigate to Admin > Employee Management
2. Select multiple employees using the checkboxes
3. Click Bulk Actions > Update Pay Rates
4. Enter the new pay rate or percentage increase
5. Choose which employees to apply the change to
6. Click Apply Changes

Location Budget Configuration

To set and monitor labor budgets by location:

1. Navigate to Admin > Locations
2. Select the location to configure
3. Click the Budget tab
4. Set the Monthly Labor Budget value
5. Click Save Changes

The system will track actual costs against this budget and provide alerts when approaching or exceeding budgeted amounts.

Role-Based Pay Settings

While individual employees have their own pay rates, you can manage default rates by role:

1. Navigate to Admin > Roles & Positions
2. Select the role to configure
3. In the Compensation Settings section, set:
   • Default Hourly Rate: Starting rate for employees in this role
   • Overtime Settings: Default overtime eligibility for this role
4. Click Save Role Settings

When adding a new employee to this role, these default settings will be applied initially but can be adjusted per employee.

Special Pay Conditions

Configure special pay situations:

Holiday Pay

1. Navigate to Admin > Business Setup > Pay Rules > Special Conditions
2. In the Holiday Pay section, configure:
   • Holiday Pay Multiplier: Rate multiplier for holiday work (e.g., 1.5, 2.0)
   • Eligible Holidays: Select which holidays apply
   • Eligibility Rules: Set which employees are eligible

Night Differential

1. In the Night Differential section, configure:
   • Night Hours Start: When night differential begins (e.g., 10:00 PM)
   • Night Hours End: When night differential ends (e.g., 6:00 AM)
   • Night Differential Rate: Additional amount per hour during night hours

On-Call Pay

1. In the On-Call Pay section, configure:
   • On-Call Rate: Hourly or flat rate for on-call time
   • Activation Pay: Additional pay when called in

Cost Estimation and Reporting

The Shifts platform provides tools to monitor and report on labor costs:

Shift Cost Estimation

When creating or editing shifts, estimated costs are calculated based on:

1. Scheduled hours × hourly rates of assigned employees
2. Application of overtime rules based on employees’ weekly schedules
3. Special pay conditions that may apply

This helps prevent budget surprises and allows for cost-optimized scheduling.

Labor Cost Reports

To view labor cost reports:

1. Navigate to Admin > Reports > Labor Costs
2. Select the date range and locations to include
3. Choose from report types:
   • Actual vs. Budgeted: Compare actual costs to budget
   • By Location: Break down costs by location
   • By Department: Break down costs by department
   • By Employee: See costs per employee
   • Overtime Analysis: Focus on overtime costs and trends
4. Click Generate Report
5. Use the Export button to download CSV or PDF versions

Integration with Payroll

Pay rules configuration provides the foundation for payroll processing:

1. Timesheet Data: Hours worked and rates flow into timesheet approval
2. Payroll Export: Approved data can be exported to payroll systems
3. Cost Allocation: Labor costs can be allocated to departments and cost centers

For details on connecting with your payroll system, see Payroll Integration.

Best Practices

For optimal results when configuring pay rules:

1. Align with Policy: Ensure digital rules match your company policy documents
2. Verify Compliance: Confirm settings meet all legal requirements for your locations
3. Audit Regularly: Review pay settings quarterly to ensure accuracy
4. Document Special Cases: Maintain records of any custom pay arrangements
5. Test Scenarios: Verify calculations with test scenarios before full implementation
6. Monitor Costs: Regularly review labor cost reports to identify trends
7. Update Promptly: When pay rates change, update the system immediately
8. Cross-Check: Periodically verify system calculations against manual calculations

Troubleshooting Common Issues

Incorrect Overtime Calculation

• Check overtime eligibility for the employee
• Verify weekly hours are being tracked correctly
• Confirm overtime thresholds are configured properly

Budget Overruns

• Check for unexpected overtime
• Verify hourly rates are correct
• Look for shift extensions beyond scheduled times
• Review actual vs. scheduled hours reports

Timesheet Discrepancies

• Ensure check-in/out times are being recorded correctly
• Verify break times are properly tracked
• Check for missed punches or unapproved corrections

Related Resources

• Locations & Departments
• Role Based Access
• Payroll Integration
• Overtime Management

This article should be updated when:

1. New pay calculation rules or options are added
2. Overtime calculation methods change
3. Special pay condition options are expanded
4. Labor budget tracking features are enhanced
5. Regulatory changes affect pay rule requirements