Two Pay Rates for One Employee

HR in TX · February 2003

Can someone please advise me about if you can pay someone two different rates for different work? I have an employee who is billable to a project and we would like to pay him more while he works on that project. When he is just part of our support staff he usually is paid a lesser amount. Is it allowable to pay him a higher rate for the project and a lower rate as part of our support staff? Thank you.

Theresa Gegen TX · February 2003

You can if the tasks are actually different. (This will complicate any overtime calculations you have to do for this employee(.

For example, an employer can pay a lower hourly rate for travel or training than other parts of the job.

If the tasks are the same on the project and when working as a support person, a different rate might not be as easy to justify.

Good Luck!!

windjam · February 2003

I have several employees where we pay different rates depending on the job. You might want to check your state laws as to the effect on overtime. In Oregon, overtime becomes a blended rate of the two. You pay everything at straight time, figure the average rate and divide by two and that becomes the OT rate for ALL hours.

RoseF · February 2003

We are in Louisiana and we have several hourly ee's who work 2 different jobs. We use a computer time clock, each job in our company has a specific code and the ee's enter their time using that job code. Those with more than one job code clock in with the job code for that specific job. The time clock keeps track of hours per code and Payroll is set up to pay the hours per code at that code's rate. Overtime, whether incurred on one job or the other, is always paid at the rate that is time and a half of the average of the two rates. No hassles, no legal issues, the ee's are happy....that makes me happy.

HRManager · May 2003

This is more of a question than a reply. I have a part time employee. He works sometimes only two weeks per month. Some months, just a few hours and some months - he works 60 hours in one week. I understand I need to pay overtime on the weeks he goes over 40 hours. He is now asking if we can pay him a small salary and when he does these overtime shows, pay him at a different rate. So in essence for one job he would be part time exempt and the other part time hourly - Is this legal in Minnesota? Also, what if we paid him a small salary and called the "other" pay - commission? Any help would be appreciated.

Theresa Gegen TX · May 2003

Whether or not he is exempt or hourly depends on the tasks he is doing. If he is doing exempt work, then the salary idea would be okay (but it wouldn't not be blended hourly and exempt). If he is doing hourly work, he is entitled to overtime under federal law (and you can't even agree to get out of paying overtime).

Good Luck!

Two Pay Rates for One Employee

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