# PAYHOURS vs WORKED HOURS

In a nutshell, Payhours is a term referring to the hours you pay for and this does not necessarily equal the number of hours a person works. When you pay someone you will need to know not only how many hours they actually worked "on the clock", but you will need to factor that for their payhours when budgeting and planning your days.

**DOING THE MATH**

For this example, let's use these assumptions: The person makes $10 per hour. All rates are in USD.

The general minimum for work per day is 8 hours. Keep in mind that the 8-hour minimum does not apply to travel days or some unioin members in certain situations. Refer to your individual contracts for more. Also, we will not make out math more difficult here, so I am not including fringes - we'll only consider the hourly wage.

Working 8 hours for $10 means the person makes $80. Working any time over that starts to incur overtime.

Generally speaking, overtime works like this:

- First 8 hours = "Straight Time"
- Hours 9 to 12 = One-and-a-half Pay (1.5x)
- Over 12 hours = Double-Time Pay (2x)

So, this same person working 9 hours would make $95. That's the first 8 at straight-time, and the last hour would be at 1.5x rate, or $15. Using this principal, we can then start speaking in "Payhours" and say that this person works 9.5 Payhours (9 working hours). Partial hours are broken to tenths of an hour, and I'll talk about that in a moment. As a quick chart, here you can see the work hours plus overtime (OT) vs. payhours for this general rule.

In case you are wondering why I keep saying general rule, it's because there are many exceptions. Be sure to read your union agreements and contracts carefully to ensure you are budgeting the person, or group of people, correctly. There is a right way and a wrong way to budget over time and I cover it in more detail in Budgeting Overtime.

**USING TENTHS OF AN HOUR**

For calculating payhours, the most common method is to divide an hour by 10, or by each six minutes. This means that if a person ends working within each six-minute period, he is paid for that period. For example, if a person works 8 hours and 35 minutes, then he worked 8.5 hours. If he worked 8 hours and 37 minutes, it would be 8.6. Here's the breakdown chart for easy reference:

My last bit of advice on the side is to watch out for crew people who "conveniently" eek out an extra .1 hours. That adds up after a few days.

**MEAL, NON-DEDUCTIBLE BREAKS (NDB) and GRACE**

Speaking in terms of union projects, you need to offer a meal break every six hours. This means that for each person, you need to offer a meal break six hours after they start. Generally, "lunch" is six hours after crew call.

You might hear the term "Calling Grace". This means that the crew is allowing the producers an extra 12 minutes on top of the 6-hours to finish a shot in progress. Listen here, this is important: "A shot in progress". This means that you can't call grace, then shoot something, then set-up something else and shoot that. No! It's only allowed for the one shot set-up which is currently in progress. Another thing to keep in mind on this is that your lunch break time begins from the end of grace (or whenever you finally break for lunch). Also, if you break grace, or go past the 12 minutes working, then you incur penalties. These are called Meal Penalty Violations, or MPV. Different unions and positions have different costs, but per person, the costs can range from $7.50 and up - per each 30 minutes of violation after the initial six hours.

When working 12 or more hours, in California, you may not deduct the meal break from the total hours worked to calculate the number of Payhours. What this means, basically (and technically), is that if someone works 12 hours, their pay hours is actually 14.25 hours. You need to add up all the time, including the meal break. If the total hours is over 12, then only count 4 hours minus the meal break as calculated time in the "1.5x" portion. Take the portion of time that was in the 1.5x time and add it to anything over 12 and calculate that amount of time as 2x. Is that clear as mud now? So, if someone works 12 hours with a 30 minute meal break, that's 8 + (3.5 x 1.5) + (.5 x 2). If they worked 13 hours, that would be 8 + (3.5 x 1.5) + (1.5 x 2). Get it? This is a (not so) minor detail which is mostly dealt with by accounting and payroll, but you should know that this issue exists.

For the record, I am sure my accountant wants to kill me for explaining it like that.

**BREAKING OUT DAILY & WEEKLY PAY TO HOURLY**

When doing a budget, some crew are what's called "exempt". Aside from some legal implications, this also indicates that as weekly or daily hires overtime is applied to them. For budgeting purposes, these are easier because someone who makes $2000 per week, is $2000 per week. It does not matter if they physically worked 4 hours in a day or 12. Hold on, let's qualify that - for all daily and weekly employees, there will be a set amount of hours which this amount covers. For some it's 54, others 60 and other higher. Regardless, to say it another way, if the person in that given week works 54 hours, or 34 hours - they still get $2000.

You may want to "back into" a number for some crew, for example, the PA's. Many times, people like simply saying, "The PA's will make $125 per day." Sounds easy enough, but PA's are not exempt, and thus need to account for overtime. So, you then need to establish with the employee that the $125 rate covers a certain number of hours per day. Let's say you both agree to 12 hours. This means his payhours are 14 per day. Now, divide $125 by 14 to get his hourly. It's $8.928. Yes, you should use three decimal places for hourly rates.

If you say that someone works a weekly for $1000, then you also need to agree on the number of days per week the person will work. So, let's say five to keep the math simple. So, now we know this person makes $200 per day ($1000/5) and we can now divide $200 by 14 to get their payhours (persuming this person will work 12 hours a day).

Long story longer, you should try to think of people as hourly as often as possible. It's the more accurate way to budget.