HR & Payroll Tools

Overtime Audit

Ten overtime practices the Department of Labor checks first: regular rate, bonuses, shift differentials, rounding, auto-deducted breaks and more. Score your risk.
Last update:
October 15, 2026
Not sure where you stand?
Let the system do the regular rate math

CoAd Pay with time and attendance applies bonuses, differentials, rounding and state daily-overtime rules on every run, so the regular rate is right without anyone doing the math. $55/mo + $5 per employee.

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Overtime errors are rarely about the 1.5 multiplier. They come from what goes into the regular rate (bonuses, differentials, commissions), how hours are counted (rounding, auto-deducted lunches, off-the-clock work) and state rules that go beyond the FLSA. Answer ten yes-or-no questions about how you run payroll today and get a risk score with the fixes ranked. The labor cost calculator shows what overtime does to your fully loaded rate.

Overtime audit: are you calculating it right?

Ten practices the Department of Labor checks first. Yes means you already do it.
Do you include nondiscretionary bonuses (attendance, production, retention) in the regular rate before computing overtime?
Do you include shift differentials and commissions in the regular rate?
Is overtime calculated per workweek, never averaged across two weeks or a pay period?
If you round time, is it to the nearest 7 minutes or less and neutral over time?
Are auto-deducted meal breaks only taken when the break was actually uninterrupted?
Is pre-shift and post-shift work (setup, closing, emails, travel between sites) paid?
For salaried non-exempt employees, do you still pay overtime over 40 hours?
Do you avoid private-sector comp time in place of overtime pay?
Do you apply daily overtime rules where they exist (CA, AK, NV, CO)?
Are day-rate and piece-rate workers paid overtime on their computed regular rate?
Overtime risk
    Let the system do the regular rate math

    CoAd Pay with time and attendance applies bonuses, differentials and state rules to overtime automatically. $55/mo + $5 per employee.

    See pricing
    Based on FLSA regular-rate and timekeeping rules; state law can be stricter. Back wages in overtime claims typically run two to three years plus liquidated damages. Educational, not legal advice.

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