Salaried to Hourly and back again
jakech
6 Posts
Maybe I'm missing something here. A local privately held bank pays it's employees(non-exempt)a weekly salary. If they work over 40 hours they are paid at 1/2 the equivalent hourly rate based on the 40 hour salary. Does this not go against FLSA. I mentioned the nature of the business because that is the justification the bank gives for this arrangement. They claim that because they are privately owned they can do what they want. Finally, when it is beneficial to the bank, they convert the employee to hourly; for example when they are attending school and not working 40 hour weeks. I just don't see where this is within the parameters of the FLSA. Any input?
Comments
[url]http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=29&PART=778&SECTION=113&YEAR=1998&TYPE=TEXT[/url]
[url]http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=29&PART=778&SECTION=114&YEAR=1998&TYPE=TEXT[/url]
Sounds like something is fishy over there.....
We used to do that, but employees found it very confusing. We paid semi-monthly and everyone started with a "base" pay, then we collected time sheets and adjusted for any overtime worked, vacation taken, or unpaid leave. This never changed their status as non-exempt employees even if we had to adjust their pay one period and not the next and back again the next. If they worked 8 hours a day, each day during the period, they received the base pay, no adjustments. However, if one day they worked 9 hours, they were paid OT for that extra hour. I think perhaps another confusion is that the bank says they pay 1/2 the regular wage for the hours over 40. I learned in a payroll seminar that what I thought of as OT (1 1/2 times the regular rate) was actually a wrong term. The OT only applies to the extra, the 1/2 over the regular rate because it was considered that you paid the regular rate for all hours, then the OT rate of 1/2 on only the OT hours.
The ee's regular rate for the 50 hours week would be $200/50 = $4.00. The required additional payment for 10 hours of overtime would be the regular rate of $4.00/2 = $2.00 times 10 hours = $20.00 in overtime. Total pay for the week would be $220.00} WHEW!
Although this was a decision by the CFO passed down to Accounting and Payroll, it was the job of HR to explain this c- - - to every ee who brought his/her check down to us with a frown. The decision to pay this way, I thought, was insane, although legal. The amount it saved the company in overtime payments paled in comparison to the huge negative morale' factor, not to mention all the time the company paid HR to sit and try to explain this madness. x:-(