Overtime Premium Calculations for Utah

OK. I realize this headline may not be an amazing attention grabber for many of you but the information is extremely useful to all of us that have workers’ comp insurance in Utah and want to save some money. This information was gleaned from Update – a magazine for policyholders of workers compensation fund:

On all policies written or renewed after June 1, 2008, WCF (Workers Compensation Fund of Utah) will apply new guidelines established by the Utah Insurance Department for overtime payroll allocation. Under the new rule, policyholders will see a decrease in the amount of premium paid on overtime pay.

Extra pay for overtime has previously been included in premium calculation. However, on all policies written or renewed after June 1, 2008, overtime pay will be excluded from payroll calculations.

Overtime

The new overtime guidelines describe overtime as any hours worked for which there is an increase in the rate of pay. Examples of overtime pay may include:

a. For work in any day, or in any week, in excess of the number of hours normally worked
b. For hours worked in excess of eight hours in any day or 40 hours in any week.
c. For work on Saturday, Sunday or holidays
d. In the case of a guaranteed wage agreement, overtime means only those hours worked in excess of the number specified in a set agreement.

Qualification

To qualify for the exclusion of extra pay for overtime, the policyholder’s books and records must document overtime pay separated by employee and classification.