Therapy credit in leau of OT

Trish · August 2001

An employee has requested that instead of being paid OT, she would prefer to receive credit for a family member to receive therapy. (this is an occupational therapy clinic) Would Wage & Hour go for this?

Down_the_Middle · August 2001

I would avoid that like the plague and explain to the employee that your organization does not/cannot substitute benefits for the waiver of overtime payments. FLSA specifically prohibits employees from waiving any entitlement to overtime pay, so trying this "substitution technique" strikes me as a huge mistake and at the very least, an administrative nightmare. How would you monitor the amount of occup therapy so it results in an equal amount of overtime?????

Margaret Morford · August 2001

DTM is exactly right. However, does your company have a relationship with a rehab clinic? We had an employee who had to put her daughter into rehab. Our company got a significant discount at the facility. We had the rehab billed to the company so that it was charged at the discount rate and the employee paid us back by payroll deductions. We saved her thousands of dollars. You could pay the employee OT and then let him/her pay you for the therapy by payroll deductions.

Margaret Morford
theHRedge

Cheryl S SPHR · August 2001

I agree with the others -- no way! I would however, try to find a way to help the employee obtain the therapy for the family member. Substituting credit for OT pay just isn't the appropriate (or legal) answer. Good luck!

BB · August 2001

You should also keep in mind that the IRS will not like this as you and the employee will not be paying tax on the OT wages.
Just a thought,
BB

Therapy credit in leau of OT

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