New Overtime Laws - Part-timers

evo · July 2004

I have many part-timers who earn less than $455 per week, but would exceed $455 per week if their pay was annualized. And they pass one of the exemption duties test. How do I handle these employees? Any thoughts? Thanks!

Shadowfax · July 2004

Just because someone passes an exemption test doesn't mean you must make them exempt. If they're part time, then I assume they aare paid hourly, and it make no difference.

evo · July 2004

Thanks so much for responding.

We have many part-timers who are paid on a salaried basis. They just work fewer hours. And if I annualized their salary, they exceed the threshold. And they pass the exemption tests. But I find nothing in the regs about annualizing part-time salaries.

Any thoughts?

E Wart · July 2004

[font size="1" color="#FF0000"]LAST EDITED ON 07-15-04 AT 10:16AM (CST)[/font][br][br]As I am sure you know, the salary requirement is only one part of the test. Considering they meet all the other requirements to be considered exempt, they MUST be paid at least $455 per week whether their schedule is 50% of the time or 100% of the time. No exceptions. (You can NOT consider pro-rating to increase it so that it will take you over the $455.)
Hope this helps. (I was told this specifically by an attorney this week at a FLSA training.)
E Wart

evo · July 2004

Thank you. This helps tremendously, though it's not the answer we would have liked.

Do you know if this is documented in a place that I could show to satisfy my excutives, who will want to believe I am incorrect?

Are you using the "fee basis" to get around this in any of these cases? There seems to be a lot of room there for subjectivity.

Again, thank you.

E Wart · July 2004

The weekly (and with highly compensated the annual) salary is one of the items that has to be met for the exempt status. If it isn't met, then they aren't exempt even if all other items are met.
E Wart

evo · July 2004

Thanks again.

Another question. We have part-timers who make less than the $23,660, and therefore would not be exempt, but are at the moment paid on a salary basis. We pay them the same amount each pay period, with the expectation that on average they work 20 or so hours per week. It sounds like we must now pay these individuals on an hourly basis, based on timesheets, in order to ensure that they are paid overtime and time and a half, when required.

Is this correct?

Hatchetman · July 2004

[font size="1" color="#FF0000"]LAST EDITED ON 07-16-04 AT 07:57PM (CST)[/font][br][br]

You say that a part timer may not make the $455 each week but could if the pay was annualized. I'm not quite sure what you mean, but remember, you can make them exempt salaried if you have a pay period that is longer than one week and would meet the minimum salary requirement for that pay period (assuming they also meet the duties test).

From Fair Pay Regulation 541.600(b):

"The $455 a week may be translated into equivalent amounts for periods longer than one week. The requirement will be met if the employee is compensated biweekly on a salary basis of $910, semimonthly on a salary basis of $985.83, or monthly on a salary basis of $1,971.66. However, the shortest period of payment that will meet this compensation requirement is one week."

evo · July 2004

I have people that make less than $455 per week, but they don't work 35 hours. They work something less. But, if I divided their pay into their hours worked, and multiply by 35 hours, the pay would exceed $455. But from the previous response, and from the language, I gather I can not do that. The law is $455, regardless of the hours, days worked. Do you agree?

Having said that, some of those who fall into this category, in my organization, are paid the same amount every week. If the new law now considers them exempt, would you agree that they need to be paid based on hours worked, since we must track these hours for overtime?

Thanks for your assistance.

Pork · July 2004

MY WEEKLY READER tells me that the $ollar amount $455.00 per week is the entry block into the first test of determination of EXEMPT OR NON-EXEMPT STATUS (dollars received and hours worked have nothing to do with EXEMPT STATUS). If your information available falls short of the $ollar test, then you answer is that the position fails to meet the first test of EXEMPT STATUS. Bottom line, this person must then be paid as a non-exempt, an hourly rate of pay is the appropriate method of calculating ones wage earnings who is non-exempt. Nothing changed here for part-timers regardless if they are paid less than $455.00 salary for the week, of 40 hours which is $11.38 per hour. Still nothing changed that I am aware.

If paid more than $455.00 per week then you may want to continue to discover particular answers to questions about their job task and decision making responsibilities or supervisory responsibilities to determine if the position rates consideration of EXEMPT STATUS. FAILING TO SATISFY THE DECISION MAKING AND SUPERVISORY TEST ONE MUST ASSUME THE POSITION SHOULD BE non-exempt and paid hourly.

New Overtime Laws - Part-timers

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