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<blockquote data-quote="STFXG" data-source="post: 1976002" data-attributes="member: 41750"><p>From <a href="http://www.flsa.com/overtime.html" target="_blank">http://www.flsa.com/overtime.html</a></p><p></p><p>Since you don't believe me and can't find it on your own.</p><p></p><p></p><p>"Salaried nonexempt employees."</p><p></p><p>The FLSA does not require that nonexempt employees be paid hourly. Nonexempt employees may be paid by means of a salary. Salaried nonexempt employees are still entitled to FLSA overtime pay if, when and to the extent that they actually work more than 40 hours in a work week. FLSA overtime pay is time and one-half of the employee's regular rate of pay. When a nonexempt employee is paid by a salary, the amount of the salary must be converted to its hourly equivalent to determine the regular rate of pay (time and one-half of which is the employee's FLSA overtime rate of pay).</p><p></p><p>The FLSA formula for determining the regular rate is to divide the total amount of straight time compensation received by the employee "for work" by the number of hours that compensation was intended to pay for. For example, if nonexempt employee "A" is paid a salary of $400 per week for a normal 40 hour work week, the hourly equivalent is $10 per hour. However, the FLSA does not prescribe how many hours per week of straight time a salary must be intended to compensate. This is left to the market, and the arrangements between employers and employees. Thus, for example, a nonexempt employee ("B") may be hired at a salary of $400 as straight time compensation for a normal work week of 50 hours. In that situation, the hourly equivalent of this salary is $8 per hour. If the employee ("C") is hired at a salary of $400 per week for 37.5 normal straight time hours per week, the hourly equivalent is $10.67 per hour.</p><p></p><p>Assuming that the salary is the entire compensation received by the employee for work, the employee's regular rate of pay -- and therefore the FLSA overtime rate of pay -- varies depending on what the salary is "for." Assume the hypothetical employees described above actually worked 55 hours in a work week -- 15 FLSA overtime hours. Employee "A's" regular rate is $10 per hour, which paid straight time for 40 hours. S/he is due $15 per hour for each FLSA overtime hour, or an additional $225, for total pay due of $625.</p><p></p><p>Employee "B" is different. S/he is also due time and one-half for 15 FLSA overtime hours worked, but s/he has "already" been paid the straight time rate of $8 per hour for the first 50 hours. S/he is therefore due "the difference" between the $8 of straight time already paid for these hours and the time and one-half overtime rate of $12 per hour for these hours, or an additional $4 per hour for 10 hours, or an additional $40. S/he has been paid nothing for hours 51-55, and is due $12 per hour for each of these. Thus, total wages due hypothetical employee "B" are $400 + $40 + $60 = $500. This kind of regular rate computation is sometimes, but inaccurately, known as a "half time" pay system.</p><p></p><p>Employee "C" has a regular rate of $10.67 per hour, and therefore an FLSA overtime rate of $16 per hour. The salary did not compensate for any of the FLSA overtime hours (hours 41-55), so s/he is entitled to an additional $240 for these. However, s/he also worked hours 37.5-40, which are not FLSA overtime hours. In a work week when employee "C" did not work any FLSA overtime, how s/he was paid for hours 37.5-40 would not be an FLSA concern at all. However, an FLSA regulation requires that in FLSA overtime work weeks, the employee must be paid "all straight time due" in addition to all FLSA overtime due. Absent some peculiar employment arrangement governing payment for hours 37.5-40 (and no such arrangement exists in the hypothetical), employee "C" must be paid straight time for those, or 2.5 hours at $10.67 per hour = $26.68. Total pay due employee "C" is therefore $400 + $26.68 + $240 = $666.68.</p><p></p><p>There is another possible way that nonexempt employees may be paid on a salary, and that is if a salary is intended to compensate at straight time for "all" hours worked by the employee, whether "few or many." This type of straight time pay arrangement is permitted under the FLSA for nonexempt employees whose hours of work vary from work week to work week (and typically when their normal hours vary so that in some weeks they work fewer than 40 hours). Under these circumstances, a salary designed to compensate at straight time for "all" hours worked is called a "salary for fluctuating hours." On this kind of pay plan, the FLSA regular rate arithmetic formula is the same, but it results in some unusual computations.</p><p></p><p>To determine the regular rate for a nonexempt employee paid a salary for fluctuating hours requires dividing the salary amount by how many hours the employee actually worked in the work week. (Since the salary for fluctuating hours compensates at straight time for "whatever" number of hours were worked, the number of hours it was "intended" to compensate depends on how many hours were in fact worked.) Since (almost by definition), the hours actually worked by such an employee may vary from week to week, the employee's regular rate of pay may also vary from week to week. The more hours were actually worked, the less the regular rate is. For example, if employee "D" receives a $400 "salary for fluctuating hours," and worked 60 hours in some week, the regular rate for that week is $6.67. However, if "D" worked 48 hours in the following week, the regular rate for that week would be $8.33. In the first week, "D" is entitled to 20 hours of FLSA overtime pay, at time and one-half the regular rate of pay for that work week. Time and one-half $6.67 is $10. However, the salary has already compensated "D" at straight time for each hour worked. What "D" is due is "the difference" between the $6.67 regular rate for that week and the $10 FLSA overtime rate for that week, for 20 FLSA overtime hours, or an additional $3.33 per hour for 20 FLSA overtime hours, for a total of $400 + $66.60 = $466.60. In the second week, when "D" worked 48 hours, s/he is due time and one-half of the regular rate of $8.33 for each of the 8 FLSA overtime hours worked. Since s/he has already been paid $8.33 for each of these FLSA overtime hours in the salary, what is due is an additional $4.16 for each FLSA overtime hour. Thus, for the 48 hour week, "D" is due $400 + $33.28 = $433.28. A salary for fluctuating hours is another variation of the type of FLSA overtime pay which is sometimes (but inaccurately) called a "half time" system. Valid wage plans using salaries for fluctuating hours are rare.</p></blockquote><p></p>
[QUOTE="STFXG, post: 1976002, member: 41750"] From [URL]http://www.flsa.com/overtime.html[/URL] Since you don't believe me and can't find it on your own. "Salaried nonexempt employees." The FLSA does not require that nonexempt employees be paid hourly. Nonexempt employees may be paid by means of a salary. Salaried nonexempt employees are still entitled to FLSA overtime pay if, when and to the extent that they actually work more than 40 hours in a work week. FLSA overtime pay is time and one-half of the employee's regular rate of pay. When a nonexempt employee is paid by a salary, the amount of the salary must be converted to its hourly equivalent to determine the regular rate of pay (time and one-half of which is the employee's FLSA overtime rate of pay). The FLSA formula for determining the regular rate is to divide the total amount of straight time compensation received by the employee "for work" by the number of hours that compensation was intended to pay for. For example, if nonexempt employee "A" is paid a salary of $400 per week for a normal 40 hour work week, the hourly equivalent is $10 per hour. However, the FLSA does not prescribe how many hours per week of straight time a salary must be intended to compensate. This is left to the market, and the arrangements between employers and employees. Thus, for example, a nonexempt employee ("B") may be hired at a salary of $400 as straight time compensation for a normal work week of 50 hours. In that situation, the hourly equivalent of this salary is $8 per hour. If the employee ("C") is hired at a salary of $400 per week for 37.5 normal straight time hours per week, the hourly equivalent is $10.67 per hour. Assuming that the salary is the entire compensation received by the employee for work, the employee's regular rate of pay -- and therefore the FLSA overtime rate of pay -- varies depending on what the salary is "for." Assume the hypothetical employees described above actually worked 55 hours in a work week -- 15 FLSA overtime hours. Employee "A's" regular rate is $10 per hour, which paid straight time for 40 hours. S/he is due $15 per hour for each FLSA overtime hour, or an additional $225, for total pay due of $625. Employee "B" is different. S/he is also due time and one-half for 15 FLSA overtime hours worked, but s/he has "already" been paid the straight time rate of $8 per hour for the first 50 hours. S/he is therefore due "the difference" between the $8 of straight time already paid for these hours and the time and one-half overtime rate of $12 per hour for these hours, or an additional $4 per hour for 10 hours, or an additional $40. S/he has been paid nothing for hours 51-55, and is due $12 per hour for each of these. Thus, total wages due hypothetical employee "B" are $400 + $40 + $60 = $500. This kind of regular rate computation is sometimes, but inaccurately, known as a "half time" pay system. Employee "C" has a regular rate of $10.67 per hour, and therefore an FLSA overtime rate of $16 per hour. The salary did not compensate for any of the FLSA overtime hours (hours 41-55), so s/he is entitled to an additional $240 for these. However, s/he also worked hours 37.5-40, which are not FLSA overtime hours. In a work week when employee "C" did not work any FLSA overtime, how s/he was paid for hours 37.5-40 would not be an FLSA concern at all. However, an FLSA regulation requires that in FLSA overtime work weeks, the employee must be paid "all straight time due" in addition to all FLSA overtime due. Absent some peculiar employment arrangement governing payment for hours 37.5-40 (and no such arrangement exists in the hypothetical), employee "C" must be paid straight time for those, or 2.5 hours at $10.67 per hour = $26.68. Total pay due employee "C" is therefore $400 + $26.68 + $240 = $666.68. There is another possible way that nonexempt employees may be paid on a salary, and that is if a salary is intended to compensate at straight time for "all" hours worked by the employee, whether "few or many." This type of straight time pay arrangement is permitted under the FLSA for nonexempt employees whose hours of work vary from work week to work week (and typically when their normal hours vary so that in some weeks they work fewer than 40 hours). Under these circumstances, a salary designed to compensate at straight time for "all" hours worked is called a "salary for fluctuating hours." On this kind of pay plan, the FLSA regular rate arithmetic formula is the same, but it results in some unusual computations. To determine the regular rate for a nonexempt employee paid a salary for fluctuating hours requires dividing the salary amount by how many hours the employee actually worked in the work week. (Since the salary for fluctuating hours compensates at straight time for "whatever" number of hours were worked, the number of hours it was "intended" to compensate depends on how many hours were in fact worked.) Since (almost by definition), the hours actually worked by such an employee may vary from week to week, the employee's regular rate of pay may also vary from week to week. The more hours were actually worked, the less the regular rate is. For example, if employee "D" receives a $400 "salary for fluctuating hours," and worked 60 hours in some week, the regular rate for that week is $6.67. However, if "D" worked 48 hours in the following week, the regular rate for that week would be $8.33. In the first week, "D" is entitled to 20 hours of FLSA overtime pay, at time and one-half the regular rate of pay for that work week. Time and one-half $6.67 is $10. However, the salary has already compensated "D" at straight time for each hour worked. What "D" is due is "the difference" between the $6.67 regular rate for that week and the $10 FLSA overtime rate for that week, for 20 FLSA overtime hours, or an additional $3.33 per hour for 20 FLSA overtime hours, for a total of $400 + $66.60 = $466.60. In the second week, when "D" worked 48 hours, s/he is due time and one-half of the regular rate of $8.33 for each of the 8 FLSA overtime hours worked. Since s/he has already been paid $8.33 for each of these FLSA overtime hours in the salary, what is due is an additional $4.16 for each FLSA overtime hour. Thus, for the 48 hour week, "D" is due $400 + $33.28 = $433.28. A salary for fluctuating hours is another variation of the type of FLSA overtime pay which is sometimes (but inaccurately) called a "half time" system. Valid wage plans using salaries for fluctuating hours are rare. [/QUOTE]
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