Vested Interest in Wrongfully Paid Overtime?

We are a county government and have recently discovered that one county department has been paying holiday pay at double time rather than time and a half for non-exempt, salaried employees. The county does not have a policy regarding this issue and wants to implement one wherein employees will get time and a half for working on a holiday, and then the FLSA required time and a half for hours worked in excess of 40.

So, have the employees who have been payed double on holidays obtained some kind of vested interest in this extra pay? If we change the policy and reduce their pay calculation to time and a half, do we have to make some kind of pay-out for this conversion to a new policy? Thanks!

Edited to add: I think I just found the answer myself. It's not a vested interest unless is an individual entitlement grounded in state law, which cannot be removed except “for cause.” My state has no laws concerning holiday pay, so there is no vested interest here and we do not have to offer some kind of pay-out for the switch to the new policy.


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  • I don't think so; unless you have union contracts that require different overtime rates for different positions/departments. Even without specific language, I'm sure the union would argue a past practice has been established; but I don't believe it has. I would make the change to have consistency among all employees.
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