Reminder: Getting a salary doesn’t preclude OT entitlement
We realize this is Payroll 101, but you’d be surprised by how many companies run afoul of this basic rule: Just because an employee receives a salary doesn’t mean he or she isn’t entitled to overtime payments.
That’s a lesson learned the hard way by a Tampa business. Workers for La Bella Vida Assisted Living Facility were paid a set salary for their scheduled shifts.
The problem: These workers often worked more than their scheduled hours – in some cases, 100 hours or more in a week. That caused their hourly rate to dip well below minimum wage, at times to the equivalent of $3 to $5 an hour.
A Fair Labor Standards Act (FLSA) investigation resulted in La Bella Vida being required to pay $287,087 in back wages and damages to 20 employees, the Dept. of Labor (DOL) recently said.
Salaried doesn’t mean exempt
Companies can choose to pay nonexempt employees a flat salary – but that doesn’t mean they’re exempt.
You still need to track every hour for these employees. That’s because you need to know when they work more than 40 hours in a workweek so you can pay overtime, and you can’t let their pay rate dip below the federal minimum wage, the FLSA states.
- Share on
Free Training & Resources
White Papers
Provided by Anaplan
White Papers
Provided by Anaplan
Further Reading
When IRS reduced the electronic filing threshold, the change impacted a long list of information returns. Now, the list of forms to e-file ...
Improperly calculating employees’ overtime pay can be an expensive mistake, as a Cincinnati-based logistics provider recently learned the...
A residential construction company in Idaho learned how payroll errors can quickly turn into significant financial exposure. After a fed...
IRS gave an update on several initiatives that have been in the works longer than expected. The Service’s latest goals are contained i...
Some payroll staffers may assume that complying with IRS regulations is enough to keep their companies out of trouble. That’s not ...
A big reason employers are still allowing hybrid work is business benefits like reduced operating costs. But it’s also harder to ensu...
