Different hourly and overtime rates for different responsibilities

JWH

We have several different employment areas. They include a Child Development Center (CDC) with teachers, a nursery that runs on Sundays and some week nights, a Mothers Day Out program that runs on Tuesdays and Fridays as well as an After School Care program that runs during the week.

A few of our CDC teachers have been employed for many years and now have a high hourly rate. These same people baby sit in the nursery and accumulate additional time. In the past we paid them the same rate for nursery duty as we paid for teaching in the CDC. In addition, they received overtime at this high rate. We value these employees but we are now paying an extremely high rate for their nursery service, especially at overtime rates.

We would like to pay them a lower rate for the nursery duty than we pay them for teaching in the CDC. In addition, there is a question as to whether we have to pay them overtime when they are working in two different areas. Their duties and responsibilities as a nursery worker are certainly not the same as a pre-school teacher in the CDC.

sandra_d

Besides any negative feedback coming from the employees who would be facing a lower wage for the nursery work, there isn't any legal reason that I can think of to not do what you are suggesting. However, you would owe overtime because it is all work for the same employer - different jobs doesn't allow you to not pay ot. The overtime rate would be lower because it would be calculated at the average hourly rate of pay rather than calculated at the higher hourly rate they currently earn.

Example: If all of their hours are worked at a rate of $10/hr - their overtime rate is $15/hr. If instead they work 40 hours at $10/hr and 5 hours at $7/hr, their average hourly rate is [(40 x $10) + (5 x $7)] / 45 hrs = $9.67 average hourly rate - at time and one-half they would have an overtime rate of $14.51.

Petard

Sandra_d's advice of paying a weighted average is probably the way you want to go. The federal rules for calculating overtime for employees working at two or more rates can be found at 29 CFR 778.115.
See [url]www.dol.gov/dol/allcfr/ESA/Title_29/Part_778/29CFR778.115.htm[/url]

However, it's permissible under the federal regs to pay for overtime hours working in the nursery at the nursery rate times time-and-one-half. Using Sandra_d's example, those five OT hours in the nursery could be paid at $7.00 x 1.5 or $10.50/hour. To do this, the employee and employer have to agree ahead of time on this payment method. There doesn't have to be a formal contract, but it would be a good idea to put it in writing somewhere, just in case.
See [url]www.dol.gov/dol/allcfr/ESA/Title_29/Part_778/29CFR778.419.htm[/url]

As a practical matter, it may be more difficult to get your CDC workers to pull nursery duty if you were to pay overtime at the lower rate. In addition, I'm learning by hard experience that state regs can be more restrictive than the federal regs.

Good luck.