Hello guys!
The HR Professional will doubtless need to have some math skills as well as understand how to calculate some HR problems that involve math. Its really easy when you know the formulas and understand what the question is asking for.I have pulled some math questions from my upcoming book, "1,000 HR Certification Questions With Explanations" to explain how to solve the typical HR certification questions which require calculations. I hope it helps!
A. Calculating Overtime With Bonuses
Overtime is calculated as time and half or 1.5 or 150% of regular pay for nonexempt employees. However, non-discretionary bonuses must be added to compensation to accurately calculate the regular rate of pay for overtime purposes. Read the line below from the WHD carefully;
"Nonexempt employees must be paid at least time-and-one-half their “regular rate” of pay for all hours worked over 40 in a workweek. The “regular rate” includes an employee’s hourly rate plus the value of some other types of compensation such as bonuses and shift differentials. The only remuneration excluded from the regular rate under the FLSA are certain specified types of payments like discretionary bonuses, gifts, contributions."
Question
- Shewa earns an hourly rate of $12 and worked 47 hours in the 14th workweek. Shewa is to receive a one-time $30 holiday bonus, she is also entitled to $10 as a weekly perfect attendance bonus. With the information given, how much is Shewa’s total weekly compensation for the 14th workweek?
- $646.74.
- $646.
- $616.12.
- 616.
Explanation. A. Shewa is entitled to overtime pay because she worked more than 40 hours in the workweek. Remember that non-discretionary bonuses will be included to calculate overtime pay.
Step 1: calculate Shewa’s regular pay (total pay+additional compensation)=($12*47)+ $10 = $564+ $10 = $574;
Step 2: calculate Shewa’s regular rate of pay (regular pay divided by total hours worked)=$574/47 = $12.21;
Step 3: calculate Shewa’s overtime pay (regular rate of pay*0.5*(hours worked-40 hours) = $12.21*0.5*(47-40) = $12.21*0.5*7 = $42.74;
Step 4: Total weekly compensation = $564 (being her total pay) + $30 (being her holiday bonus) + $10 (being her perfect attendance bonus) + $42.74 (being her overtime pay in which the non-discretionary $10 bonus was included) = $646.74.
NOTE: Even though Shewa is to earn $564 ($12*47 hours) as her regular pay, because the $10 perfect attendance bonus is not a one-time incentive and is dependent on her hours worked, it is therefore non-discretionary and must be factored into her overtime pay calculations.
Please note that the holiday bonus was not included to calculate the overtime pay because it is a one-time bonus and discretionary.
B. Compa-ratio
This is easy to calculate as well as long as you know what is expected of you and the formula! Each position has a salary range that includes a minimum, a midpoint, and a maximum. Compa-ratio is the employee's salary divided by the midpoint of the salary range, multiply by 100 to get your answer in percentage. It helps to compare an employee's pay to the midpoint which is usually viewed as 100% of what a fully productive employee should earn.
Question
2. Anni corporation's Grade 1 pay range has a minimum of $22/hr and a maximum of $40/hr, the midpoint is $30/hr. What is the compa-ratios for employees A, B, C, and D if A earns $20/hr; B earns $23.7/hr; C earns $30.5/hr and D earns $42/hr? Identify which employees are green or red circle, if any?
Explanation: Employee A's compa-ratio= $20 (base pay) / $30 (midpoint) * 100 = 66.67%
Employee B's compa-ratio= $23.7 (base pay) / $30 (midpoint) * 100 = 79%
Employee C's compa-ratio= $30.5 (base pay) / $30 (midpoint) * 100 = 101.67%
Employee D's compa-ratio= $42 (base pay) / $30 (midpoint) * 100 = 140%
Green circle means pay below the minimum pay range while Red circle is pay above the maximum pay range. Employee A's pay ($20) is green circle while Employee D ($42) is red circle.
C. Incident Rate and DART (Days Away, Restrictions and Transfers) Rate
Incident Rate is a trending number based on your Injury & Illness rates if employees had worked 200,000 hours, OSHA uses a 200,000 hours benchmark. Incident Rate is calculated as the Number of Injuries and Illnesses * 200,000 divided by the actual hours worked in a year.
Question
3. The Antsy company had 160 injuries and 400,000 hours worked by all employees during the previous year. What is the recordable incident rate?
Explanation: Incident Rate Formula: Injuries*200,000
Hours worked
= 160*200,000
400, 000
Injury and Illness Rate = 80
DART means Days Away, Restrictions and Transfers Rate. So, in the midst of the Injury and Illness recorded, there will be some critical cases that result in Days Away, Restrictions or Transfers. DART is based only on those injuries and illnesses severe enough to warrant "Days Away, Restrictions and Transfers". A company should have a lower DART rate than its Incidence rate.
Question
4. The Gatti corporation had 180 Injuries and Illnesses in 2015 with 2 cases resulting in Transfers monthly; it also recorded 500,000 hours worked for all employees in 2015. What is the DART Rate?
Explanation: If 2 cases resulted in trasnfers monthly, 2 * 12 (number of months in a year) = 24 DART cases.
DART Rate Formula: Total Number of DART Incidences*200,000
Hours worked
= 24*200,000
500,000
DART Rate = 9.6
D. Calculating Overtime Plus Shift Premium Pay
Sometimes in calculating overtime, you have to calculate the regular rate of pay in a different way, especially in shift premiums which can be a percentage of the hourly rate of pay. Let's see an example below;
Question
5. Anita works in a grocery store. She worked 47 hours in week 9. She makes $17/hour and receives a shift premium of 15%. How much is Anita's gross pay for week 9?
Explanation Step 1: First find Anita's regular pay plus premium = $17 + 15% = $17+2.55 = 19.55
Step 2: Straight-Time Earning-Multiply her 40 hours by her regular rate of pay = 40*19.55= $782
Step 3: Find her Overtime Earnings - 7*(19.55 + 1/2 of 19.55)= 7*(19.55+9.78)= 7*29.33=$205.31
Step 4: Find her gross pay by adding her Straight-Time Earnings and Overtime Earnings=$782+205.31
Step 5: Anita's gross pay = $987.31
Let me know if you have any questions by leaving a comment and I will be sure to respond ASAP!
All the best!
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