Calculating overtime pay

Achieving federal, state, local compliant outcomes

Accurately paying employees

Reducing risk for Gusto and customers

Summary

What was delivered

Services

• Drove design lifecycle from end-to-end

• Lead design and product strategy

• Conducted user testing

• Improved accessibility standards

Deliverables

• Product spec

• Hi-fidelity designs

• Prototype

• User testing insights

Outcome

• Created intuitive product experience in the existing payroll flow that allows employers to achieve accurate and complaint overtime calculations for non-exempt employees.

• Gusto and employers are 100% compliant with federal, state and local regulations.

Understanding the problem

What is regular rate of pay?

Regular rate of pay (RRoP) is a payroll concept used to calculate overtime premiums under the Fair Labor Standards Act (FLSA) for non-exempt hourly and salaried employees.

Why it's important?

As per the FLSA regulations, Gusto must calculate an employee’s gross pay based on their Regular Rate of Pay, which takes into account any additional earnings or overtime worked by a nonexempt employee. To ensure precise calculations, Gusto requires detailed information on the employee’s work hours and earnings per work week.

Regular rate of pay formula

What's a workweek?

A work week is any seven, consecutive 24-hour periods established by an employer. For example, a standard work week starts Sunday and ends Saturday.

Why does it matter to Gusto?

Customers who use Gusto’s time tracking product have a concept of a work week in Gusto’s payroll product. However, customers who do not use the time tracking product cannot associate the hours worked or earnings earned with a specific work week, increasing the risk of potential underpayment of their employees.

Regular rate of pay formula

The solution

Refactor internal calculations

Revise the internal payroll calculations to accurately calculate the correct output when provided with the appropriate input.

New payroll experience

The Regular Rate of Pay concept was introduced into Gusto’s payroll experience, providing employers with easy access to the workweek breakdown entry point when running payroll. Additionally, a warning alert was added to inform employers which employees require a review of their work week breakdown before moving to the next step in the payroll run flow.

Assign by workweek

With the new workweek breakdown component, employers can now specify the hours worked and earnings earned by their employees. The component uses a data table with a single cell/column for each data set and includes input and caption headers to assist keyboard and screen-reader users in understanding the relationship between data sets.

Classify custom earnings

Developed a feature on the payroll settings page that enables employers to select whether to include or exclude an existing custom earning type from the regular rate of pay calculation.

Custom inputs

The custom earnings dialog provides a simple way for employers to categorize and describe their custom earnings, as well as to decide whether they should be included or excluded in the regular rate of pay calculation. Additionally, a warning alert is displayed to inform employers of the potential consequences of excluding custom earnings from an employee’s pay.

Adding workweek breakdown for employees

Outcomes

Correct calculations

Non-exempt employees can now be paid accurately with Gusto’s updated payroll feature, allowing customers to easily specify hours worked and earnings earned by work week.

Customer compliance

With Gusto’s updated payroll system, employers can be assured that they are 100% compliant with all federal, state, and local regulations.