TiM functionality does not allow rates to be offered in terms of 'per day' without a guarantee (except for DGA, SAG-AFTRA, and Local 800 members, whose collective bargaining agreement is high enough above minimum wage) because offering pay rate on a per day basis is a dangerous practice that can easily lead to a liability lawsuit against an employer (Like this one. Or this one.)

*For more information, see: Why can't I enter a day rate in TiM?*

**Understand: A 'Day Rate' is different than a 'Guarantee':**

A **Day Rate** is a rate that is offered in terms of 'per day' with no guarantee. The employee will receive a set amount regardless of how many hours they work that day.

A **Guarantee** is a rate that will be paid if an employee works between zero and a set amount of hours, regardless if that employee works less than the set amount. Any time spent working after the guarantee is reached is usually paid at an overtime rate.

**Receiving a Day Rate versus receiving a Guarantee:**

Let's see what Taylor, a Location Scout working in California, would be paid if he is offered a Day Rate versus a Guarantee:

### Day Rate:

Taylor is offered a day rate of $250 per day. On Monday, Taylor works 10 hours and receives $250. On Tuesday, Taylor works 15 hours and again receives $250.

### Guarantee:

Taylor is offered a guarantee of $250/12, or $250 for 12 hours. On Monday, Taylor works 10 hours, and receives $250. On Tuesday, Taylor works 15 hours and receives $357.

Taylor is paid more with a guaranteed rate because in California, overtime hits after 8 hours of work in a day. From 8 until 12 hours, California employees must be paid at 1.5x the regular hourly rate, and after 12 hours, employees must be paid 2x the regular hourly rate.

**Calculating hourly rates based on your expected 'Day Rate':**

If you want to receive a certain rate, it is possible to calculate the proper hourly rate of pay so your guarantee equals the desired rate.

If your guarantee is 12, and the overtime kicks in after 8 hours, and the overtime rate is 1.5x the regular hourly rate, simply divide your desired rate by 14 and you will get your hourly rate.

A guarantee of $650/12 = $46.4285 per hour (650/14)

A guarantee of $250/12 = $17.8571 per hour (250/14)

A guarantee of $150/12 = $10.7142 per hour (150/14)

### What is Taylor's hourly rate?

If Taylor's rate is $250/12, to calculate his hourly rate, your first instinct may be to divide $250 by 12. This is incorrect because it does not take into account overtime rates.

Taylor works in California, where overtime hits after 8 hours at a rate of 1.5x the regular hourly rate (and raises to 2x after 12 hours).

8 of his guaranteed hours will be at the regular hourly rate.

4 of his guaranteed hours will be at 1.5x the regular hourly rate.

12 hours with California overtime factored in equals being paid for 14 hours at the regular hourly rate:

8 + (4 x 1.5 = 6) = 14

So to calculate Taylor's hourly rate, divide his rate by the number of hours that equals his rate:

$250 / 14 hours = $17.8571 per hour

**Important Notes for Admins: **

- TiM encourages best practices to avoid future liabilities.
- Employees should agree to an hourly rate and understand how overtime takes affect depending on both the state law and their guarantee.
- It is the production's responsibility to make sure employee rates are within federal and state regulations.
- In TiM, an employee cannot be Invited to a Project without a rate being set in the Employee Invite.

## Pro Tips:

- Reach out to your payroll coordinator for any questions you may have regarding hourly rates, or exempt versus non-exempt employees.
- On the Employee Invite, under Employment Details, there is an area available for "Add'l Rate and Basis Notes" (see image below). Admins should feel free to include an explanation of how an employee's hourly rate translates to a guarantee.
- For example: "Dear Taylor, $17.8571 per hour = $250/12, with overtime factored in."

*Here's to educating the crew and paying people correctly!*

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