AboutBrian Phillips Expertise Can answer questions in areas of wage and hour, OT, Fair labor standards, FMLA, COBRA, Recruiting, Interviewing techniques, employee manuals, HRIS rollout, Employee Leasing Staffing company cost analysis, bacon, eggs, and more. Essentially a well rounded HR generalist who operates a Human Resource consulting and service business named Harvis Inc. Questions not answered - try me..
Experience Formerly responsible for all Human Resource activity for a staffing company with 2,500 annual employees as well as an employee leasing / PEO business with 1,500 annual employees. Designed and implemented all HR structure to support hundereds of clients in excess of $ 500 million in payroll volume over career in Human Resources.
Organizations Greater Wilkes-Barre Chamber of Business and Industry - former HR co-chair for HR Taskforce; Tri-County Personnel Association (oldest continuous operating "HR" association in the nation (we think)); Business Association member
Publications Northeast PA Business Journal - interviewed a few times
HR Insights - Chamber of Commerce HR publication
Education/Credentials Bloomsburg State University, Pennsylvania 1993 BS Marketing
Awards and Honors My wife lets me eat chicken wings when I take out the trash...
Other than that, no HR honors
Expert: Brian Phillips Date: 7/7/2008 Subject: Overtime compensation
Question My question is; can a company pay a non-exempt salaried employee a declining rate of overtime?
Example. My salary is 40,000/year.
This works out to $769.23 for a 40 hr week ($19.23/hr)
I am on a set schedule and am required to work M-F 7:30 am to 4:00 pm. Anything over 40 hours is paid "overtime" but that overtime is calculated like this.
For example; 5 hrs over time worked 769.23/45 = ($17.09/hr) - the 5 hrs of overtime are paid at this rate - which is less than my "normal" rate.
I was under the impression that overtime was required to be time and a half, for people who fall under FSLA.
Answer Hi Pamella,
OKAY, At first glance, it seems Like what you are explaining is known as "salary half-time" and if calculated correctly is perfectly Kosher. Unfortunately, I think the calculation as you have it is not correct.
First, let me assume a few things:
- 1- you are NOT exempt and would fail the duties test of the FLSA- this means although you make 40 K, you get the same salary each week even if you work LESS than 40 hours. So , there is no penalty or pay cut/ dock for working less than 40 hours.. If so, REPLY - that is not good !!
- 2 - you are entitled to half time( because you earn a salary) not time and a half.
- 3- your employer COULD pay you time and 1/2 but they are not obligated to do so since they opt to pay a salary and abide by salary half time rules.
- 4 - GOOD NEWS: Although the formula as you presented it is not correct as- per the Federal regulations, it is MORE than you should get using the correct formula. ( $ 10.82 per hour is the 1/2 time rate for hours over 40 with correct formula based on 45 hours worked. 45 x 19.23 = 865.35 865.35 / 40 hours = new rate for purpose of calculating 1/2 time = 21.63 / 2 = $10.81).
so, 40 hours = 769.23 + 5 x 10.81 = 54.08; 54.08 + 769.23 =
$ 823.31 gross- I am pretty sure this would be the correct rate at 45 hours using sal. half time formula.
- 5 - So, why would a business pay salary half time ? So they could pay a salary and save alot of money on overtime - all while being 100 percent compliant.
The reason more employers dont offer salary half time is because of your reason. When they find out, they realize they probably missed out on at least $ 19.23 per hour for each hour you worked overtime. Alot of pay.- and all in compliance.
NOW, go and ask to be paid hourly , then OT will apply at 1 1/2 for hours over 40 per work week - if they agree to it....
