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Administrator Guide
Last Updated: 2025-09-19
Steps: Set Up Payroll for the Fair Labor Standards Act (USA)

Steps: Set Up Payroll for the Fair Labor Standards Act (USA)

The worker must be nonexempt.
Security:
Set Up: Payroll (FLSA) - USA
 domain in the USA Payroll functional area.
When configured, Workday Fair Labor Standards Act (FLSA) payroll processing enables you to manage:
  • FLSA work periods that cross pay periods.
  • Manual and on-demand payroll results to accumulate by FLSA work period.
  • Automatic adjustments to the overtime premium rate, which eliminates the need to run retro processing in certain scenarios.
  • Retro processing of FLSA eligible bonuses.
  1. Workday assigns workers to FLSA work periods based on the criteria that you specify in period calendar rules.
  2. Workday uses FLSA work periods to calculate FLSA wages and taxes for assigned nonexempt workers.
  4. (Optional) Extend an FLSA work period calendar by building additional work period events.
    1. Access the
      View FLSA Work Period Calendar
       task and select the calendar that you want to extend.
    2. Select
      FLSA Work Period Calendar
      Build Work Period Events
       from the related actions menu.
    3. Enter the
      Number of Work Periods
       to extend.
      This field automatically populates, but you can override the number.
    Security:
    Set Up: Payroll (FLSA) - USA
     domain in the USA Payroll functional area.
  5. Limit retroactive processing to recent FLSA configuration.
    1. Access the
      Change No Retro Processing Prior To Date for Group of Workers
       task.
    2. Select the
      Pay Run Group
       or
      Pay Group
      .
    Workday changes the
    No Retro Processing Prior To
     date for the group to the last completed pay period plus one day. Workday no longer processes retro for periods before this date.
    Security:
    Process: Run Batch Calculations (Retro Calculation)
     domain in the Core Payroll functional area.
  6. Access the
    Create Earning
     task to configure FLSA earnings for automatic FLSA adjustment processing.
    Create separate earnings for each FLSA calculation. Examples:
    • An earning for regular hours, plus any over 40, at the FLSA regular rate
    • An FLSA premium rate earning for overtime hours.
    • An earning for FLSA straight time of overtime and overtime premium that includes both regular and premium earnings.
    • An FLSA bonus earning to allocate earnings across a coverage period.
    As you configure the earning, consider:
    Option Description
    Calculation
    Workday provides several calculations that you can use to configure FLSA earnings.
    When creating an FLSA bonus earning, directly reference the amount entered in a pay input or one-time payment. You can't use a related calculation or a pay-component related calculation to calculate the bonus.
    Resolve by FLSA Period
    When you select this check box, Workday displays the earning on the
    FLSA
     tab of the
    View Payroll Results
     report. Workday applies the earning to the appropriate FLSA week based on the FLSA work period calendars.
    Allow Coverage Dates for Bonuses
    Select this check box to enable coverage dates for FLSA when you also select the
    Resolve by FLSA Period
     check box.
    You can then enter coverage dates on payroll input and one-time payments to determine how Workday allocates FLSA bonus amounts when the coverage dates span multiple FLSA periods.
    FLSA Bonus Allocation Across Coverage Dates
    Select an allocation method to determine how to pay FLSA bonuses on active and inactive periods. The allocation method that you select depends on whether you want to calculate and pay the bonus in nonactive periods.
    Security:
    Set Up: Payroll (Calculations - Payroll Specific)
     domain in the Core Payroll functional area.
  7. If you’re adding payroll input for an FLSA bonus, add coverage dates. Workday then has the bonus allocate earnings across the coverage period and automatically adjust the FLSA premium rate.
You can now calculate payroll that includes FLSA payments, including FLSA bonuses that allocate the bonus across coverage dates. Workday automatically adjusts the FLSA premium rates and pays the difference.