Salary Regular Pay w/Holiday
OneBadWebMonkey
8 Posts
Hi All,
I’ve recently taken over the role of HR and employees have brought a possible discrepancy to my attention.
We have several salaried non-exempt (they punch a clock) employees. If they work less than 40 hrs, we deduct the shorted time from their PTO. If they work over 40 hrs, we pay O.T.
If the employee worked 31 regular hours during a holiday week, the company pays 31 regular, 1 PTO and 8 holiday hrs to equal 40 regular hrs.
If the employee works 33 regular hours during a holiday week, the company pays 40 regular hours; (32 reg and 8 holiday) stating to the employee, ‘its because you are salaried’.
It seems to me that if the employee worked 33 regular hours during a holiday week, they should be paid 41 regular (no O.T.) hours and that their salaried non-exempt status should have no bearing on shorting their pay, based upon the way we pay in other situations I've used as examples.
Am I missing something?
Thanks!
Mark
I’ve recently taken over the role of HR and employees have brought a possible discrepancy to my attention.
We have several salaried non-exempt (they punch a clock) employees. If they work less than 40 hrs, we deduct the shorted time from their PTO. If they work over 40 hrs, we pay O.T.
If the employee worked 31 regular hours during a holiday week, the company pays 31 regular, 1 PTO and 8 holiday hrs to equal 40 regular hrs.
If the employee works 33 regular hours during a holiday week, the company pays 40 regular hours; (32 reg and 8 holiday) stating to the employee, ‘its because you are salaried’.
It seems to me that if the employee worked 33 regular hours during a holiday week, they should be paid 41 regular (no O.T.) hours and that their salaried non-exempt status should have no bearing on shorting their pay, based upon the way we pay in other situations I've used as examples.
Am I missing something?
Thanks!
Mark
Comments
Not sure what your question is.
I don't think you "missed" anything as far as outlining the facts of the situation; however, what to do about it is another question.
Your company's creative use of the term “salaried non-exempt” and the subsequent (and predictable) misunderstandings that follow is the reason that I've never quite understood the popularity of this relatively new term in the wage and hour business. I’ve heard all of the arguments for its use, but I’m not buying them. You see, there really is no such animal.
As far as the Fair Labor Standards Act (FLSA) is concerned, an employee is either hourly, or salaried. They are either exempt from the overtime regulations set forth in FLSA, i.e., salaried, or they are not exempt from the overtime regulations, and therefore they are hourly. One can play with the terminology all day and it will not change the basic premise. If an employee is, by law, entitled to overtime pay for time spent performing work for an employer in excess of forty hours per week, that employee is a non-exempt hourly employee. The use of creative semantics does not give rise to a third category.
More to your point, the FLSA requires overtime pay (for non-exempts) for “hours-worked” in excess of forty in any single work week. Your company’s policies addressing the complications that can arise with holiday pay for non-exempts can be more employee-friendly than the law requires, but not less.
Geno, SPHR
BTW Geno - ditto on everything you said!
[url]http://arcweb.sos.state.or.us/rules/OARS_800/OAR_839/839_020.html[/url]
(A) An employee employed on a fixed salary may have hours of work which vary from work week to work week and the salary may be paid to the employee pursuant to an understanding with the employer that such employee will receive such fixed amount of compensation for whatever hours the employee is called upon to work in a work week, whether few or many. Where there is a clear mutual understanding of the parties that the fixed salary is compensation for the hours worked each work week, whatever their number, such a salary arrangement is permitted if the amount of the salary is sufficient to provide compensation to the employee at a rate not less than the applicable statutory minimum wage rate for every hour worked in those work weeks in which the number of hours worked is greatest, and if the employee receives overtime compensation, in addition to such salary, for all hours worked in excess of 40, at a rate not less than one-half the regular rate of pay. Since, under such an arrangement, the number of hours actually worked will fluctuate from work week to work week, the regular rate of the employee will vary from week to week and is determined by dividing the number of hours worked in the work week into the amount of the salary to obtain the applicable regular hourly rate for any given work week. Payment for overtime hours worked in excess of 40 hours in such work week at one-half such hourly rate in addition to the salary satisfies the requirements of this rule because such hours have already been compensated at the regular rate, under the salary arrangement.
I had to read a couple of times for it to make sense but it would appear that if you are paying these non-exempt salaried employees, you cannot deduct for hours worked under forty. In a sense, at least as I understand this paragraph, by calling them salaried, you are saying "do this job each week for this much pay".
Its assumed that their actual hours worked will fluctuate but the pay will remain fixed unless they work over 40 hours and then they receive "overtime" which is a rate of no less than half their normal pay. The tricky part is that rate of pay seems to fluctuate depending on how many hours were actually worked.
Am I misunderstanding something?