Calculating an Employee's Hours Worked

For purposes of paying employees, federal wage and hour laws revolve around how many hours an employee works in a workweek. So, administering payroll must include determining how many hours of work an employee did and must be paid for.

Why is it important? You need to know the hours worked for determining both the minimum wage and overtime requirements. For purposes of the minimum wage, the "hours worked" will be the number you divide into your employee's pay to determine the hourly wage. For purposes of overtime, the "hours worked" will be the number you use to determine when you owe overtime pay.

Factors to consider when calculating hours worked. In calculating how many hours an employee has worked in a workweek, you must take into consideration the following factors:

• what counts as compensable time and what doesn't
• what "incidental" activities are compensable
• how to handle meal and break times
• how to keep track of an employee's hours
• when you may give employees comp time
• when to deduct pay for tardy employees
• when to deduct pay from salaried employees