paying salary and overtime for non-exempts

Somehow i lost the posting that i was going to respond to where someone stated you couldn't be salaried and non-exempt, but I have found a great resource for dealing with the issue of being non-exempt and salaried. It does not go against FLSA as long as it is done correctly.  You have to search for it under google but the article is entitled "salary alternatives for the non-exempt" and was done at payroll-taxes dot com.  There are a few subsections that talk about different weird types of payroll situations.

 I do both HR and payroll and that article has helped me quite a few times in the past and does a great job of putting it all in layman's language.  Hopefully it will help those that need it. I am in no way related to the site or person who wrote the article.


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  • Nonexempt employees are often paid on a salary basis, but still must be paid overtime if they work more than 40 hours in a workweek. There is a simple standard method for calculating the amount of overtime owed such employees and alternate methods that reduce the amount of overtime owed. The alternate methods have additional requirements described below.

    Standard method. If a nonexempt employee works over 40 hours (e.g., 50 hours at a base salary of $400 per week for a 40-hour week), the standard way of calculating the weekly pay is as follows:

    A. Divide the weekly rate by 40 ($400/40 = $10) and calculate the week's pay as $10 x 40 plus $15 x 10 = $550.

    Alternate method. However, if the nonexempt employee is salaried, the following methods may be used:

    B. Divide the weekly salary by the actual number of hours worked ($400/50 = $8) and calculate the week's pay as follows: $8 x 40 plus $12 x 10 = $440; or

    C. Treat the $400 as the salary for all straight-time hours worked. Overtime could be calculated as $400 plus half-time for hours over 40: $400 + [1/2 ($400/50)] x 10 = $440 (same result as B).

    By using methods B and C, it is possible (and legal) to avoid paying nonexempt employees standard time-and-a-half, based on the employee's straight-time wages, for hours worked in excess of 40. However, this can be done only if the employer:

    1. Pays the employees a guaranteed salary, even if the employee works fewer than 40 hours during a week

    2. Keeps precise time records

    3. Ensures that minimum wage rules are not violated

    4. Has a written agreement with the affected employees

    5. Refrains from deducting for certain time missed from work, such as jury duty and fractional personal and sick days

    Note: Methods B and C are seldom used, primarily because, from the employees' viewpoint, the calculations are difficult to understand. Furthermore, employees may be unwilling to put in any significant amounts of overtime and might prefer to work for organizations that pay “normal” overtime. From the employer's viewpoint, this approach is unpopular because of the fear that workers will abuse the guaranteed salary.
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