Hey there! I wanted to chat a bit about something that comes up often.
In Germany and for sure in other countries as well there is the regulation that part time employees are entitled for an overtime premium only, when they have reached the full-time equivalent regular hours. Else you could be employed as a part-time employee but work as much as a full-time employee but receive a higher payment, cause the overtime premium is usually higher than the normal pay.
I’ve often heard from customers who struggle to set this up. But trust me, it’s not as complex as it sounds.
In fact, having different scheduled working times for both, full-time and part-time employees doesn’t result in separate Time Recording Profiles. And the best part? This configuration works seamlessly for part-time employees with variable working times.
Let me illustrate with an example.
Well, say the scheduled hours for a part-time employee are 35 per week, whereas a regular full-time employee works for 38 hours per week. For any overtime hours worked up to the scheduled working time of a full-time employee (35-38), the part-time employee receives only standard base pay. The first 2 hours beyond 38 hours must be paid with a 25% premium. All the overtime beyond 2 hours per day are paid with a 50% premium.
An example of Scheduled Working Time for part-time and full-time employees
I’ve figured out a nifty solution to calculate this. Most of our Time Recording Profiles already start with time valuations that deduct breaks from both the scheduled working time and the recorded working time.
The very first new Time Valuation is to determine whether the employee is full-time or part-time to apply the appropriate calculations for each.
For full-time folks, the premium calculation follows a straightforward process. In one Time Valuation, we split their weekly overtime into two categories (25% premium and 50% premium) based on 2 hours as a threshold.
On the other hand, for part-timers, we compare their scheduled working time with that of a full-timer, splitting their weekly overtime into regular pay for hours up to the full-time hours, and premium pay for hours beyond that. We then further split the premium pay portion based on if it’s less than 2 hours (25% premium) or more (50% premium).
Here’s a helpful Graph that illustrates the Time Valuations and their orchestration.
Graph of a Time Recording Profile for part-time and full-time employees
So that’s the basic principle. I hope this makes things clearer!
Now, it’s essential to check or adapt existing Time Recording Profiles – the Thresholds might need adjusting if for instance, your Time Type Groups differ. Also, remember to consider additional requirements and any Time Type Groups that include recorded overtime.
For more tips and hints on Time Valuation, check out this blog post (https://blogs.sap.com/2022/10/20/how-to-setup-time-evaluation-in-time-tracking/). This should have you all set up, minimizing the stress of part-time payroll calculations. Happy managing!