Understanding compensation models

Usually, when employees work outside their work schedule, it's categorized as overtime and requires different compensation.

This overtime compensation often involves using a conversion factor, where the value of one hour differs from standard hours. These conversion factors can be determined based on the specific day or time the employee works.

Additionally, overtime compensation can be administered using either Time Off or Payroll, often with specific criteria governing how this compensation is applied.

Time categories and time blocks

By utilizing time categories and blocks, you have the ability to define specific days or time slots for tracking time in a differentiated manner. This includes applying conversion factors and specifying whether the time tracked within those ranges can be compensated with Time Off, Payroll or added to the Balance.

Time Categories and Blocks enable you to:

• Create time categories and define if they will track regular or overtime days/hours
• Define conversion factors for each category
• Assign time blocks (specific day(s) or time slots) to each time category
• Specify whether the overtime blocks are compensated with Time Off, Payroll or added to the Balance

Setting up Time categories and Time blocks

Create work time categories

Create time categories to track and compensate regular hours and overtime.

1. On your sidebar, go to Settings
2. In Time section, click on Time categories
3. Click on New category
4. Name the new category
5. Choose the type:
   • Regular: standard hours an employee is expected to work
   • Overtime: any hour worked beyond the standard number or regular working hours
   • Flexible: categories that can track any work hour regardless if it’s regular or overtime.
6. Save

Define values for time categories

Define the equivalence of the hours worked in each time category.

1. From the Time categories page, click on Go to Time tracking settings button inside the blue banner
2. Choose the time tracking policy (if you have more than one)
3. Click on New value
4. Select the Time category
5. Define the conversion factor
6. Save

Create and assign time blocks to each time category

Assign the time categories to specific days or time slots and define its compensation.

1. From the Work time categorization page, click on New time block
2. Select the Time category
3. Select the Days
4. Decide if apply to:
   1. Full day
   2. Specific time slot
5. Click on Continue
6. Choose the compensation method:

• Time off: time tracked in this time block will be automatically compensated.
• Payroll: time tracked in this time block will be available for manual payroll compensation on the employe timesheet page.
• Balance: time tracked in this time block will be transferred to Balance section on the employee timesheet page.

7. Save

Where to visualize worked time in Time Categories

In the Clock in page, you can access the following information:

• Worked hours: the combined amount of time, including both regular and overtime hours, for which an employee is eligible to receive compensation.
• Planned hours: the total time an employee is expected to work based on scheduled working hours.
• Balance: the difference between regular worked and planned hours. Overtime from time blocks is not taken into consideration.
• Total for compensation (visible only to managers)
  • Compensation through time off: the compensation happens automatically.
  • Compensation through payroll: you can compensate overtime on the Clock in page by clicking on Compensate.

How to export time tracking reports with time categories and time blocks info

This time tracking export is available in two versions: the full version and the summary.

1. On your sidebar, go to Time tracking
2. Click on the (...) in the upper right corner
3. Click on Download export
4. Select export type Time Tracking Export - Full version or Time Tracking Export - Summary, according to your needs
5. Fill in the required fields
6. Click on Save

You will receive the time tracking export to your email, and you can also find it in the Documents section in Factorial.

How to compensate time from Time Categories

We can choose 2 compensation methods for each time block.

• Time Off
• Payroll

Time Off compensation happens automatically. Doesn’t need the approval of the manager. Employee will see directly the time accrued in Time Off through Overtime compensation automatically updated taking into account the equivalence ratio.

For Payroll, managers with the review and approve timesheets permission will need to manually compensate this time by clicking on Compensate.

1. Select what you want to compensate

2. Select the Payroll period

Once is done, employees and managers will see that this time has already been sent to Payroll on the timesheet.

Users with access to employees’ Payroll will see this supplement in Payroll.