How to Calculate Direct Labor Cost
How to Calculate Direct Labor Cost: How to Calculate Direct Labor Cost – Calculate Man Hours - Comprehensive guide to calculating the direct labor cost of workers per construction projects.
Calculate Hours Worked & Overtime on Construction
Calculate hours worked & overtime on construction projects
Here we are going to analyse the cost of the wages of the employees in the construction companies where the employees work 10 hours a day from Monday to Saturday.
Assume that in accordance with current labour legislation we pay 8 hours Monday to Friday and the first 4 hours on Saturday as normal.
We pay 100% for Saturday hours worked over the first 4 hours.
The rest of the overtime is paid at 50%.
So we can write.
Wages of construction workers - hours paid weekly:
From Monday to Friday 8 hours x 5 days ... ... ... ... ... 40 hours.
Monday to Friday 50% 2 hours x 5 days ... ... ... ... 15 hours
Normal Saturday schedule... 4 hours x 1 day ......... 4 hours
Saturday 100%... 6 hours x 1 day .......... 12 hours
"TOTAL PAID HOURS ... ... ... ... ... ... ... ... 71 hours
Number of Hours Worked per Week
"Monday to Saturday"... ... ... ... 10 hours x 6 days... ... ... ... ... 60 hours.
Factor by which the cost of the hour should be affected ....71/60 = 1.1833. ... ... Or 18% more.
Issues Affecting Worker Performance
A) The impact of climatic factors on the site.
In cold or hot areas, task performance is lower than average
Some tasks, such as earth moving, concrete pouring or welding, are significantly affected by weather conditions.
B) The need to manage work permits the development of tasks.
In a refinery or in areas where there is a risk of fire or explosion, we cannot open the service until the areas have been checked and approved for work. All these tasks can cause a delay of an hour or more per day.
C) When employees work above ground level, there is a reduction in performance due to the risk of working at height.
D) The percentage of sick or injured people has to be taken into account (we usually estimate it at 8%).
E) Another issue to consider is when the work is carried out within an operating plant. Here we will have a significant reduction in the expected yield of about 30%... For example, in a refinery (including work permits).
The conclusion is that we have to be careful when evaluating the wages of workers in construction companies, and that we have to take into account the aspects considered above and the new ones that arise in each case.