Any Salaried/Non-Exempt Experts?
MB1004
49 Posts
If you are hired to work 47.5 hours each week for a fixed salary but receive a portion of your pay for anything over the 47.5-yet your general job duties would not even initially classify you as exempt because you spend 85%+ of your time doing manual labor, is this an incorrect classificiation to begin with?
It's a retail environment, and the empoloyees are called Department Managers, but they don't receive commissions or have any real managerial duties.
It's a retail environment, and the empoloyees are called Department Managers, but they don't receive commissions or have any real managerial duties.
Comments
under duties test, ee's may qualify for the executive, adminstrative or professional exemption to the OT rules. Must either be: executive - e.g. directs two or more full-time employees; has authority to hire/fire or make recommendations regarding the employment status of others; can exercise a high degree of independent judgement, makes at least $155/week and devotes no more than 20% of time to NON-MANAGERIAL functions, administrative - is the Ee's primary duty office or non-manual work related to the company's management; does the employee assist an executive, perform technical work or undertake special assignments? earns at last $155/week and devotes no more than 20% of his/her time to NON-ADMINISTRATIVE duties. professional - Ee works in a field that requires advanced knowledge and education (BS) or involves original and creative work in an artistic field; does the employee regularly exercise discretion and judgement in their work and is the employee's salary $170 or more per week and the Ee devotes no more than 205 of their time to NON-PROFESSIONAL FUNCTIONS. The salary test is to decide whether employees are paid ona salary basis, e.g. ee is paid same amount each payday regardless of number of hours worked in a payperiod. NOTE you may only dock the pay of a salaried employee if: Ee is absent for a FULL day or more and has used up all available leave; 2) when Ee is absent for a FULL day or more due to illness or injury per the terms of a plan or policy under which the employee receives compensation for the illness or injury (e.g, worker's comp) 3) Ee is taking FMLA, 4) Ee performs no work for over a week, 5) Ee has been suspended without pay due to violating company policy or work rules.
sorry to be so lengthy but this is such a hot topic. hope it helps.
I'm really going out on a limb here, but I vaguely remember reading about creative ways to account for built-in overtime. For example, you pay a non-exempt a salary of $512.50 per week for a 47.5-hour workweek. What you're really doing is paying him $10 per hour for the first 40 and $15 per for 7.5 OT.
If he works more than 47.5 hours, you pay him $15 per. And his hourly wage can't dip below minimum wage. And watch out for state laws that might prohibit this.
But you really, really, really shouldn't take my word for it. Talk to a lawyer if your company hasn't already. You could try the attorneys who write your state's Employment Law Letter:
[url]http://www.hrhero.com/necn/[/url]
Good luck.
James Sokolowski
HRhero.com
Example: Mary is paid a guaranteed weekly salary of $500 for all hours worked, whether many or few. Mary worked 45 hours last week. She has already been paid the guaranteed salary and the employer is required to pay at least half time for those 5 hours over 40. She has been paid 'time' already by agreement. Now she must be paid the other part of the equation, 'and a half'. Her hourly rate is determined by mathematical formula and she must be paid an additional amount for each of the five hours. The additional amount need only be half of the hourly rate. That week, her calculated hourly average rate was $11.11 ($500/45). She's already been paid $11.11 for the five hours over 40. Now the employer must pay her an additional $5.56 for each of the five hours, or an additional $27.78. Her total pay for the week shown will be $527.78.
Some employers follow this 'loophole' and it's allowed by DOL. It angers people and promotes ill will, but it's legal.
Following your example then, would the employer be violating the salary status if they docked pay for time missed (not full days)?
For example, Mary is sick and goes home early, but is out of sick time. She only puts in 38 hours for the week. She normally works 45 hours a week and receives the $527.78, guaranteed $500 plus the $27.78. The week she works 38 hours, she receives $475 (38x12.50) The employer calculates the $12.50 by $500/40hrs thinking that this would be her hourly wage. They do this with all salaried non-exempt employees everytime they miss work that is not in full day increments.
I'm not a payroll expert, but I would think this violated the salary status and would then make the ee an hourly employee. Am I way off base here?
In effect what happens is that as the hours are reduced because of absence or whatever, the hourly rate goes up to meet the guaranteed salary amount.
This non-deduction requirment is often over looked by employers, I think, in their zeal to pay the non-exempt a salary.
This provision is different from what is permitted by FLSA for docking the salary of exempts (in full day increments). The provision for non-exempts prohibits even docking the salary for full day absences.
Take a look at 29CFR778.114.
However, the regs also address a fixed salary when the employee work a fixed number of hours week in and week out. In that case, an employer may dock teh salary for absences (both full day and hourly) but then has to pay time and a half overtime. In short, as the particular regulation notes, the employee is being treated as an hourly.
Take a look at 29CFR778.113 and .306 for this method.
[url]http://www.access.gpo.gov/nara/cfr/waisidx_03/29cfr778_03.html[/url]