Regular Rate of Pay (RROP) is a calculation used for proper OT payments, as well as proper PTO payments. It is up to you to make sure you are paying the proper amount under the laws you are subject to. This topic will explain the method Medlin Payroll uses, which is compliant in most situations. The Federal Department of Labor, and your state's website will have their RROP regulations.

What is RROP?

The formula is RROP Subject Wages / Total Hours Worked = RROP.

Example: 40 hours worked at $20 per hour, plus a non-discretionary (subject to RROP) amount of $200. RROP Subject Wages are $1,000, divided by 40 hours, so the RROP is $25 an hour.

When is RROP needed?

For proper calculation of overtime and PTO., when there is ore than one pay rate, or there are additional RROP subject wages such as Piecework, Commission, or one of the RROP Income adjustments.

What types of items should be entered as part of the RROP calculation?

The most common are payments for piecework (setup Piecework as one if the Income Adjustments), Commissions (setup Commission as one of the Income Adjustments), and non-discretionary items (setup using one of the RROP Income Adjustments at the bottom of the selection list). Examples of RROP Income Adjustments (non-discretionary pay) bonus amounts, such as payment for working odd shifts, show up bonus, on call pay, guaranteed bonus, etc.

Are all bonus items subject to RROP calculations?

A bonus at the end of year which has nothing to do with hours worked is not likely subject to RROP calculations. Check with the DOL and your state, for clarification for your specific situation.

What 'triggers' RROP rather than using the employee's main hourly rate?

Employees with more than one pay rate (Pro Edition)

Piecework

Commission

Using one or both of the RROP Income adjustments

What about an employee I have marked as salaried?

The hourly rate for the salary will be based on the salary, with the hours per pay period (2080 / Paydays per year). If you are in one of the states where you have to report hours worked for salaried employees, the hours you enter will be used (salary / total hours).

How will I know RROP is being used?

On the paycheck entry screen, when RROP is part of the calculated rate (OT, PTO), instead of having the @ sign in front of the rate, there will be a * in front of the rate. Pay stubs will also show RROP rates as needed.

Is there a look back period for RROP?

Some RROP options include a look back period. For simplicity, Medlin Payroll calculates RROP using only the information on the current check. If you prefer to use a look back period, the built into Medlin RROP calculation will not work for you.

What about a check for only PTO hours, what rate is used?

Classic Edition, the employee's hourly rate.

Pro Edition, if only one rate is being used, we use the one rate. If both pay rates are being used, we use an average of both rates. If you want/need to use something other than the average of the two rates, temporarily change their pay rates to get the desired result.

What about checks with no hours, only Piecework, Commission, or RROP adjustments?

The RROP rate (which would apply only to PTO in this situation) is the total of the RROP Subject Wages / the normal work hours in the pay period (2080 / Paydays per year).