What is Spread of Hours (SoH)?
According to New York Department of Labor (Title 12 NYCRR 142) "an employee shall receive one hour's pay at the basic minimum hourly wage rate, in addition to the minimum wage for any day in which the 'spread of hours' exceeds 10 hours, or there is a 'split shift'."
The spread of hours is defined as "the interval between the beginning and end of an employee's workday, including working time plus time off for meals plus intervals off duty." A split shift is defined as "a schedule of daily hours in which the working hours required or permitted are not consecutive," while no meal period of one hour or less shall be considered an interruption of consecutive hours.
For example, an employee who works from 8:00am to 12:00pm and then again from 3pm to 7pm may be subject to an extra hour of pay at minimum rate. However, in many cases, any pay the employee receives above minimum wage (other than overtime) can be used to offset the "Spread of Hours/Split Shift" liability.
How does ADS handle Spread of Hours?
ADS has released a system update which can perform the following:
- Determine Spread of Hours liabilities
- Offset Spread of Hours liabilities with pay the employee received above minimum wage
- Calculate Spread of Hours liabilities and offsets based on the County in which the visit was performed (the NY minimum wage can vary by county)
- Calculate Spread of Hours liabilities and offsets for late timesheets (prior periods)
- In a future version, the system will have the capability of handling the Split Shift regulation as well
ADS System Calculation for SoH
For any day which the spread between the first punch of the day and the last punch of the day is greater than 10 hours, the system will add a liability of 1 SoH hour.
The hourly rate for the SoH liability will be based on the minimum rate of the location in which the work was performed. If an employee worked in a few counties that day, (with different minimum wages), the system will calculate a weighted rate.
The system calculates the SoH final liability for each week separately. It will calculate any SoH offset amounts (wages paid above minimum wage) and will post the total SoH liability for each week separately. The system will base the week start day on the payroll calendar period begin day. For example; if the current calendar period begin date is 8/21/17, then a week is from Monday to Sunday.
Record week is based upon the record begin date. For example; week starts 8/21/17, employee works from 8/20/17 at 8:00PM to 8/21/17 at 8:00AM, that record will be calculated for the week of 8/14/17, for the date of 8/20/17.
If there is a record for a prior week (late batch), the system will recalculate that week in the current check and will post a positive or negative adjustment as needed.
System Requirements for SoH Calculation
Only earning codes you indicated as subject to SoH, will be included in the SoH calculation.
Pay records must include the following to be included in the calculation:
- Amount (may be system calculated in bottom of pay entry screen)
- Record Begin Date
- Record End Date
SoH Liability Offset
Wages paid above the minimum rate (in the county worked) will be used to offset the SoH liability. Overtime premium pay can’t be used to offset the SoH liability. However, the straight time portion (of the OT) paid above minimum wage can be used to reduce the SoH liability. The system will handle this.
ADS Recommended Process
We recommend you run the SoH utility after all payroll information has been entered into the batch and you are ready to submit payroll. Once you run SoH, if you make any changes to payroll that affects SoH, you will need to rerun it.
The system will add ONE SoH record for each week needed, with a begin date of the first date of that week and an end date of the last date of that week. The record will have the total SoH dollars and hours in 1 line item.
If there is a negative SoH (the offset is more than the amount), it will not be posted.
Please review and test the SoH utility in your system and contact Team 1 Support with any questions.