In all workplaces, employees are either classified as exempt or non-exempt as it pertains to whether various wage and hour regulations apply to them. In general, exempt employees are those who primarily have management and decision-making responsibilities. Some common examples are executive, administrative, or professional employees as well as certain types of inside or outside salespeople. The misclassification of employees’ exempt status has been a fruitful source of overtime back pay awards won from litigation.
Job titles can often be misleading when categorizing different employee’s exempt statuses. For example, even though some employees may have an impressive job title (e.g. manager) a closer look at their responsibilities might reveal that they should be classified as non-exempt. State and federal law have created rules to define what exactly constitutes an exempt employee. These rules all have two requirements: a minimum salary requirement and a general description of job duties which the employee must exercise in order to be classified as exempt.
As for the salary requirement, all exempt employees must earn at least two times the state minimum wage for full-time employment. In California, this would compute to $2,773.33 per month. The duties requirement will vary depending on the type of employee. Generally, exempt employees customarily and regularly exercise discretion and independent judgment in their jobs. These judgments must be free from immediate supervision and must be of real and substantial significance to the policies or general operations of the business or its customers. It can also involve making recommendations for action to a superior authority. “Customarily and regularly” means frequently in the course of their day-to-day activities.
Showing posts with label California Overtime Laws. Show all posts
Showing posts with label California Overtime Laws. Show all posts
Sunday, July 17, 2011
Thursday, May 26, 2011
California Labor Law Regarding Meal and Rest Breaks
Here is a quick clarification of current California Meal and Rest Breaks:
According to the California Wage Orders and the Fair Labor Standards Act, employees who are classified as Nonexempt from overtime, meal and rest break requirements must be offered 10-minute paid rest breaks for every four hours they work. California labor law also says that if their shift lasts longer than 6 hours, they must also have the opportunity to take a 30-minute unpaid meal break. Under California labor law, the employer owes the employee one hour of pay if any of these breaks are not taken or the employee is unable to take a meal break. This hour of pay must be included in the following pay check.
When the employer does not comply with California labor law by restricting the opportunity for proper meal- and rest-periods, violations are calculated at one hour of additional straight time pay for each employee for each work day. California employers risk facing heavy penalties for violating California labor laws regarding meal- and rest-periods. Due to recent court decisions, the potential for large monetary fines has increased. If your employer
According to the California Wage Orders and the Fair Labor Standards Act, employees who are classified as Nonexempt from overtime, meal and rest break requirements must be offered 10-minute paid rest breaks for every four hours they work. California labor law also says that if their shift lasts longer than 6 hours, they must also have the opportunity to take a 30-minute unpaid meal break. Under California labor law, the employer owes the employee one hour of pay if any of these breaks are not taken or the employee is unable to take a meal break. This hour of pay must be included in the following pay check.
When the employer does not comply with California labor law by restricting the opportunity for proper meal- and rest-periods, violations are calculated at one hour of additional straight time pay for each employee for each work day. California employers risk facing heavy penalties for violating California labor laws regarding meal- and rest-periods. Due to recent court decisions, the potential for large monetary fines has increased. If your employer
Thursday, March 17, 2011
The Truth About California Wage and Hour Class Action Lawsuit
In California, many employers violate state employment laws. However, it is difficult for employees to find employment attorneys to represent them in these cases for many different reasons. The first reason why employees have a difficult time finding an attorney when a big company commits labor law violations is that the worker does not have the money to pay an attorney. The second reason why it is hard to find a California discrimination or wrongful termination attorney is because in some discrimination claims attorneys fees can go both ways and therefore it is not economically viable for attorneys to take the claims on a contingency basis. The final reason is that the damages in wrongful termination and discrimination lawsuits are difficult to prove. Often times, the employee is already working at a new job and therefore future lost wages are unavailable for the employee. As a result of these reasons, many employers get away with labor code violations, or do they?
California has very strict wage and hour laws. Often times, employees in the state seek an attorney because they think that their workplace rights have been violated. Perhaps a discrimination or wrongful termination violation. Many times, the employee is right: the employer fired the employee for some discriminatory reason such as pregnancy discrimination or race discrimination. Although the employee has a difficult time finding an attorney for the reasons described above, the employee may not know that his or her wage and hour violations were violated.
Under California overtime laws, employers must pay employees overtime compensation for all hours worked in excess of eight hours in a single workday and under the Fair Labor Standards Act and the California Labor Code employers must pay employees overtime compensation at one and a half times the employees regular rate of pay for all hours worked in excess of forty 40 hours in a single workweek. Often times, employers pay employees a salary and tell the employees that because they are paid a salary, they are not entitled to be paid overtime. The employees often take the employers word for it and work a lot of overtime hours without additional compensation.
Although employees may have difficulty finding an attorney to take their case for discrimination or harassment in the workplace, the employee will likely not have time finding an attorney to take their case on a contingency fee basis under a wage and hour legal theory. If plead correctly, the wage and hour claims do not give rise to two way attorneys fees and the benefits of litigating overtime claims in California are many. Meanwhile, in the wage and hour class action lawsuit, the employees still get to litigate their discrimination and harassment claims because the employer usually takes the employee's deposition and the employee gets a chance to explain how the employer's conduct was discriminatory. Although on the complaint discrimination is not named as the cause of action, at the end of the day wage and hour overtime class action attorneys enable employees to find attorneys that will help them fight back against big companies. The lawyers front all the litigation costs and the employees never pay the overtime attorneys unless the overtime lawyers win them money.
California has very strict wage and hour laws. Often times, employees in the state seek an attorney because they think that their workplace rights have been violated. Perhaps a discrimination or wrongful termination violation. Many times, the employee is right: the employer fired the employee for some discriminatory reason such as pregnancy discrimination or race discrimination. Although the employee has a difficult time finding an attorney for the reasons described above, the employee may not know that his or her wage and hour violations were violated.
Under California overtime laws, employers must pay employees overtime compensation for all hours worked in excess of eight hours in a single workday and under the Fair Labor Standards Act and the California Labor Code employers must pay employees overtime compensation at one and a half times the employees regular rate of pay for all hours worked in excess of forty 40 hours in a single workweek. Often times, employers pay employees a salary and tell the employees that because they are paid a salary, they are not entitled to be paid overtime. The employees often take the employers word for it and work a lot of overtime hours without additional compensation.
Although employees may have difficulty finding an attorney to take their case for discrimination or harassment in the workplace, the employee will likely not have time finding an attorney to take their case on a contingency fee basis under a wage and hour legal theory. If plead correctly, the wage and hour claims do not give rise to two way attorneys fees and the benefits of litigating overtime claims in California are many. Meanwhile, in the wage and hour class action lawsuit, the employees still get to litigate their discrimination and harassment claims because the employer usually takes the employee's deposition and the employee gets a chance to explain how the employer's conduct was discriminatory. Although on the complaint discrimination is not named as the cause of action, at the end of the day wage and hour overtime class action attorneys enable employees to find attorneys that will help them fight back against big companies. The lawyers front all the litigation costs and the employees never pay the overtime attorneys unless the overtime lawyers win them money.
Tuesday, March 15, 2011
CALL CENTER WAGE & HOUR LAWS
California employees are entitled, under the relevant wage and hour laws, to compensation for all hours worked. The law requires employers to pay employees overtime compensation at one and a half times the employees regular rate of pay for all hours worked in excess of eight hours in a single work day. Employees are also supposed to be paid overtime when they work more than forty hours in the same workweek. The failure to pay employees overtime pay in either of these scenarios is a violation of state and federal overtime laws.
Some companies hire call center employees that work at home as independent contractors, when in fact these virtual call center employees should be making compensation for all of the time they work. For instance, an employer may higher an employee and agree to pay that employee a certain rate for all of the time the employee is actually on the phone with the customers. As a result, the call center company is likely violating state wage and hour laws by failing to pay the virtual call center employees for all hours worked.
Despite the fact that many companies consider call center employees to be independent contractors, under California employment laws, it does not matter what the employer calls you or that the agreement actually calls you an independent contractor. Contact an employment law attorney at Blumenthal, Nordrehaug & Bhowmik today if you are working for a company from your home as a call center employee and you are not paid for all of the hours you work. You may be eligible to join or start a class action lawsuit to recover significant damages if you have a valid claim.
Tuesday, December 21, 2010
WAGE LAWS ON MANDATORY TRAINING TIME
Under California wage and hour laws, employers are required to pay all non-exempt hourly employees for attending mandatory company meetings. This means that when workers in California are required to go to a meeting, regardless of whether or not the meeting is held in person at the company or another location, or even a webinar held over the Internet, the employee is entitled to compensation at the regular rate of pay if the meeting time falls within the first 8 hours of the workday and 40 hours within the workweek. However, if mandatory meeting time pushes employees past the 8 hour workday or 40 hour workweek, California employees are entitled to overtime pay for the time spent attending mandatory meetings.
California employees are also entitled to compensation for attending mandatory training. If your former or current employer makes you perform job training off-the-clock and without compensation, contact a California employee compensation lawyer today to learn about how to get reimbursed for training time.
In particular, training typically occurs in the computer industry. Often times, computer hardware engineers, code writers, ans other computer professionals and technicians work off the clock training for the job without compensation. This can add up to a lot of unpaid compensation if these computer employees are working off the clock training for the job several hours a week. However, it is not uncommon for these computer industry workers to perform job duties off the clock and without pay because computer positions require a high degree of skill and in order to complete the job to a satisfactory level, the computer professionals must undergo such training. Computer professionals that are training for a professional position with a computer company are non-exempt from overtime laws, meaning that these employees must be paid overtime compensation for all hours worked in excess of 8 in a workday, 40 in a workweek and in excess of 6 consecutive workdays in the same workweek.
Saturday, December 11, 2010
The Five Most Common Wage and Hour Labor Law Violations
It is not uncommon for employers violate state wage and hour laws. After all, most big businesses in the state of California have committed illegal pay practices. These are probably the 5 most typical and reoccuring violations of overtime laws by employers.
1. Paying employees in California a fixed salary without overtime pay is a violation of California law. This is probably the biggest misconception. Even though many employers trick employees into thinking that they are not entitled to overtime compensation and meal and rest breaks, employees must be aware of the fact that a salary by itself does not preclude workers from making overtime pay.
2. Another major problem involves tricking highly skilled professionals into thinking that they are going to have a job under which they can exercise independent discretion and judgment but in reality the company has simply violated state overtime pay laws by misclassifying the employee as exempt.
3. The third most common wage and hour violation in California involves illegal timekeeping systems. Many companies in the state have been caught changing the hours employees work in violation of CA Law.
4. Failing to reimburse employees for work-related expenses incurred while working for the employer, whether it be gas mileage or something, has become a very prevalent and reoccuring labor law violation committed by employers.
5. Unpaid vacation time and waiting time penalties. When an employee is terminated and not paid all of the vacation time the employee earned under over the years of his or her employment, the business is violating the Labor Code. For these common vacation pay violations, employees can get waiting time penalties since vacation time is considered earn "wages" for purposes of California law.
1. Paying employees in California a fixed salary without overtime pay is a violation of California law. This is probably the biggest misconception. Even though many employers trick employees into thinking that they are not entitled to overtime compensation and meal and rest breaks, employees must be aware of the fact that a salary by itself does not preclude workers from making overtime pay.
2. Another major problem involves tricking highly skilled professionals into thinking that they are going to have a job under which they can exercise independent discretion and judgment but in reality the company has simply violated state overtime pay laws by misclassifying the employee as exempt.
3. The third most common wage and hour violation in California involves illegal timekeeping systems. Many companies in the state have been caught changing the hours employees work in violation of CA Law.
4. Failing to reimburse employees for work-related expenses incurred while working for the employer, whether it be gas mileage or something, has become a very prevalent and reoccuring labor law violation committed by employers.
5. Unpaid vacation time and waiting time penalties. When an employee is terminated and not paid all of the vacation time the employee earned under over the years of his or her employment, the business is violating the Labor Code. For these common vacation pay violations, employees can get waiting time penalties since vacation time is considered earn "wages" for purposes of California law.
Thursday, December 9, 2010
California Overtime Laws: Reporters and Journalists are supposed to be paid Overtime, says the Ninth Circuit
On September 27, 2010, the Ninth Circuit in Wang v. Chinese Daily News, 623 F.3d 743 (9th Cir. Cal. 2010) disagreed with the newspaper company, upholding violations of wage and hour laws committed against newspaper reporters and journalists. The California district court originally found that the newspaper company violated state labor laws by failing to give newspaper reporters labor law breaks and the newspaper company failed to pay the reporters proper overtime pay as required by state and federal wage and hour laws.
The newspaper company argued that it was not required to pay newspaper reporters overtime compensation for working more than 40 hour weeks under the Fair Labor Standards Act because the newspaper reporters meet the test of the creative professional exception to federal and state overtime laws. Federal wage and hour laws exempt certain companies from paying overtime compensation to professional white collar workers. To qualify as an exempt professional under federal overtime law, a newspaper reporter must be paid at least $455 every week and the reporters "primary duty" must be the performance of work involving invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.
Reporters journalists are entitled to overtime compensation when they perform job duties involving routine mental, manual, mechanical or physical work. California wage and hour law, with respect to overtime rules for professional employees and reporters, is similar to overtime laws under the Fair Labor Standards Act in that a professional employees is one who is primarily engaged in the performance of work that is original and creative in character in a recognized field of artistic endeavor and the result of which depends primarily on the invention, imagination, or talent of the employee.
The Obama Administration has chimed in on this issue about overtime pay for professional employees and reporters. The Department of Labor takes the position that journalists and reporters are required to be paid overtime compensation when they perform job duties that are limited to collections, organizing and putting data into a computer or other system. In order for newspaper reporters and journalist to be denied the benefits of state overtime laws and federal overtime laws, the employees must perform job duties that involve creation, imagination or ability. Reporters and journalists are entitled to overtime compensation under wage and hour laws when their work is routine and clerical in nature, rather than creative.
Thursday, December 2, 2010
California Overtime Laws- What time Should You get Paid for Working?
California typically defines work time somewhat more broadly than the Fair Labor Standards Act. While under federal employment law work time is paid when a company suffers or permits the employee to perform job duties, the state of California widens work time to include all that which a company suffers, permits, or “controls.” Set out below are the circumstances in which California’s broader definition of work time produces a different result.
California’s bigger description of work time, as that which a company suffers, permits or “controls,” has been construed to make extended commute time on company buses paid hours of work where the company requires workers to ride on the buses. Under the Fair Labor Standards Act, travel as a passenger outside of the regular workday on an overnight trip is not considered to be work time. The time spent by workers on company-provided shuttles from a parking lot to a work site was found not to be paid where the workers did not have to ride the shuttles from parking lots to work, but could be dropped off at the work site.
On-call time is not paid if the employee can use the time spent on call primarily for his or her own benefit. Considerations in determining whether on-call time is work time for purposes of California wage and hour laws are geographical restrictions on the employee’s movement, required response time, nature of the employment relationship, including industry practice, and any other limitation on the employee’s ability to use the time for his or her own benefit. In determining whether on-call time is work time, the state does not give any deference to whether the company and employee have agreed to consider the on-call time to be noncompensable.
California labor laws do not specifically exclude from work time certain activities that are excluded from work time under the Fair Labor Standards Act. The activities which are excluded from work time under the Fair Labor Standards Act but not California state labor law include preliminary and after-work activities, commuting time in company-provided vehicles, and clothes changing and wash
Friday, November 26, 2010
California Overtime Rights - Call Center Customer Support Workers
Call Center Customer Service Employees
A call center is a central customer service operation where employees, usually with the job titles of "customer care specialists" or "customer service representatives" handle telephone calls for a compamny regarding technical support or the sale of products and goods. Call center customer support employees are used in many different sectors of business, including mail-order catalog houses, telemarketing companies, computer product help desks, banks, financial services and insurance groups, transportation and freight handling firms, hotels, and information technology (IT) companies.
Call center customer support workers are entitled to the benefit of California labor laws. Under CA labor laws, companies are required to keep records of the wages and hours that call center employees work for the employer’s benefit. Our employment law lawyers often find that call center customer service employees do not receive the accurate itemized wage statements clearly revealing all of the information that is required by California labor laws and regulations.
A major issue with respect to the wage and hour rights of call center workers is that employers fail to pay them for all hours worked. Hours worked includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal activity of the workday to the end of the last principal activity of the workday. This includes the time call center workers spending booting up and shutting down their computers pre-shift and post-shift. An example of common violations is when employees working in call centers spend time starting computers before shifts to download work instructions, computer applications, and work-related emails.
A major issue in the call center industry is that many companies pay customer service workers a salary without additional overtime pay for working more than eight hours in a workday or forty hours in a workweek. A salary, by itself, does not exempt employees from the minimum wage or from overtime. Whether employees are exempt from minimum wage and/or overtime depends on their job duties and responsibilities as well as the salary paid. Sometimes, in call centers, salaried employees do not meet all the requirements specified by the regulations to be considered as exempt.
Contact a San Diego employment law lawyer today for a free consultation about your overtime rights in the San Francisco or Southern California.
A call center is a central customer service operation where employees, usually with the job titles of "customer care specialists" or "customer service representatives" handle telephone calls for a compamny regarding technical support or the sale of products and goods. Call center customer support employees are used in many different sectors of business, including mail-order catalog houses, telemarketing companies, computer product help desks, banks, financial services and insurance groups, transportation and freight handling firms, hotels, and information technology (IT) companies.
Call center customer support workers are entitled to the benefit of California labor laws. Under CA labor laws, companies are required to keep records of the wages and hours that call center employees work for the employer’s benefit. Our employment law lawyers often find that call center customer service employees do not receive the accurate itemized wage statements clearly revealing all of the information that is required by California labor laws and regulations.
A major issue with respect to the wage and hour rights of call center workers is that employers fail to pay them for all hours worked. Hours worked includes all time an employee must be on duty, or on the employer's premises or at any other prescribed place of work, from the beginning of the first principal activity of the workday to the end of the last principal activity of the workday. This includes the time call center workers spending booting up and shutting down their computers pre-shift and post-shift. An example of common violations is when employees working in call centers spend time starting computers before shifts to download work instructions, computer applications, and work-related emails.
A major issue in the call center industry is that many companies pay customer service workers a salary without additional overtime pay for working more than eight hours in a workday or forty hours in a workweek. A salary, by itself, does not exempt employees from the minimum wage or from overtime. Whether employees are exempt from minimum wage and/or overtime depends on their job duties and responsibilities as well as the salary paid. Sometimes, in call centers, salaried employees do not meet all the requirements specified by the regulations to be considered as exempt.
Contact a San Diego employment law lawyer today for a free consultation about your overtime rights in the San Francisco or Southern California.
Overtime Rights for Drivers and Outside Salespersons
Under California overtime laws, employees are entitled to make extra compensation for working:
- Overtime for working more than 8 hours in a single workday
- Overtime pay for working more than 40 hours in a workweek under the FLSA
- Overtime pay for working 7 consecutive workdays
- Overtime pay for working more than 12 hours in a single day at double the regular rate of pay
Many employers in California classify drivers as exempt from overtime pay, meaning that the employers fail to pay the drivers overtime wages. This can add up to a lot of unpaid wages if the drivers are working long hours. Under state overtime laws, when drivers deliver products in addition to selling product, the drivers are entitled to overtime pay unless their primary duty is actually making sales.
If you are an outside salesperson or a driver and not paid overtime wages, here are some factors you should look at to see if you are entitled to overtime wages under state labor laws and the Fair Labor Standards Act:
- Is your primary duty actually making sales?
- Compare drivers at your company making sales with other employees who make sales for the company
- Look at whether there are set standards for the amount of products the drivers are required to deliver
Employees in California that are making outside sales and not supposed to be making overtime pay under state labor laws must be making the sales at the customer’s place of business as opposed to the employer’s business over the phone. Similarly, employees are entitled to overtime pay if they are making sales by mail or the internet. Importantly, even if you work from home making sales you are not considered an outside salesperson but instead an inside salesperson and therefore unless at least fifty percent of your total income comes from commissions, you are entitled to overtime wages.
Promotional work is usually not considered making sales for purposes of California overtime laws. According to the Department of Labor and the Division of Labor and Standards Enforcement, “Promotional work that is actually performed incidental to and in conjunction with an employee’s own outside sales or solicitations is exempt work” but promotional job duties that are performed incidental to the sales that another employee is going to make is not the type of work that disqualifies the employees from overtime pay and therefore the employees are entitled to overtime pay.
Wednesday, November 24, 2010
Want to know if Your Current or Former Employer Owes You Overtime Pay under California Overtime Laws?
Want to know if your current or former employer owes you money for failing to pay you the proper amount of wages as required by California law? Here are a few examples of the types of wage and hour schemes employers use to cheat employees out of wages:
Under labor laws, courts often find that employees have a valid wage and hour overtime law claim when employers use a flag rate or piece rate compensation scheme. In particular, employers often violate state labor laws by failing to pay workers for the time they spend attending meetings and training sessions. Furthermore, many California employers are liable to employees for penalties when the employer’s fail to pay for time spent setting up work stations and booting up and shutting down computers.
Employers also frequently implement illegal comp time schemes. A comp time scheme is one where the employer fails to pay the employee overtime wages for working more than 8 hours in a workday or forty hours in a workweek because the employer tells the employee he or she can leave early the next day. For example, suppose an employee works 10 hours on Monday and the employer says you can leave two hours early tomorrow and we will mark the timekeeping system so that it looks like you worked two 8 hour days. Under California overtime laws, the employee is losing two hours of overtime pay because on Monday the employee should have been paid one and a half times the regular rate of pay for working hours 9 and 10.
Another major problem is that employers implement alternative workweek schedules without conducting a valid election process which violates the California labor law. These types of illegal employment practices often occur in the San Francisco Bay Area.
Some illegal employment law practices in Southern California often involve failing to compensate employees for travel time and time spent working off the clock from home, sending emails and making phone calls. Not only is it against California labor laws to not pay employees for time worked from home when they are non-exempt, but employers must also reimburse employees for the work-related expenses as well.
Saturday, November 20, 2010
HERE ARE A FEW IMPORTANT CALIFORNIA LABOR CODE LAWS RELATING TO OVERTIME, WAGES AND HOURS OF WORK
Daily: Work in excess of eight hours in a workday shall be compensated at the rate of one-and-one-half times the regular rate of pay. Work in excess of 12 hours in a workday shall be compensated at the rate of double the regular rate of pay.
Weekly: Any work in excess of 40 hours in any workweek shall be compensated at the rate of one-and-one-half times the regular rate of pay.
Seventh consecutive workday: The first eight hours of work on the seventh day of work in any workweek shall be compensated at the rate of one-and-one-half times the regular rate of pay, regardless of the number of hours worked during the previous six days. Every hour worked after eight hours on the seventh consecutive workday in any workweek is paid at double the regular rate of pay.
Makeup time: If an employer approves an employee's written request to make up work time that is or would be lost as a result of a personal obligation of the employee, the hours of the makeup-work time may not be counted towards computing the total number of hours worked in a day for purposes of daily overtime, except for hours in excess of 11 per day or 40 per week. This applies only if the makeup time hours are performed in the same workweek in which the work time was lost.
Amount of Overtime Pay
The overtime pay rate is one-and-one-half times the regular rate of pay for work in excess of eight hours per day or 40 hours per week and for the first eight hours worked on the seventh consecutive workday; two times the regular rate of pay for work in excess of 12 hours per day or in excess of eight hours on the seventh consecutive workday.
Tuesday, November 9, 2010
FEDERAL OVERTIME LAWS: HOLIDAY & VACATION PAY
This provision deals with the type of absences which are infrequent, sporadic or unpredictable. It has no relation to "regular absences" such as lunch periods nor to regularly scheduled days of rest. Sundays may not be workdays in a particular plant, but this does not make them either "holidays" or "vacations," or days on which the employee is absent because of failure to provide sufficient work. The term refers to those days customarily observed in the community in celebration of some historical or religious occasion; it does not refer to days of rest given to employees in lieu of or as an addition to compensation for working on other days.
The term "other similar cause" refers to payments made for periods of absence due to factors like holidays, vacations, sickness and failure of the employer to provide work. Examples of "similar causes" are absences due to jury duty, attending the funeral of a family member or inability to reach the workplace because of weather conditions. Only absences of a nonroutine character which are infrequent or sporadic or unpredictable are included in the "other similar cause" category.
The computation of overtime pay in holiday workweeks is governed by these rules:
(1) So-called "idle" holiday and vacation pay—money an employee receives whether he works or not—need not be included in figuring the regular rate. It may not, however, be offset against overtime pay due under the Act;
(2) Straight time pay which an employee receives for working on the holiday or vacation must be included in figuring the regular rate and it may not be offset against overtime pay due under the Act.
(3) Premium payments of at least an extra half-time which an employee receives for time worked on the holiday may be excluded in figuring the regular rate and may be offset against overtime pay due under the Act;
(4) A total payment of time and a half or more of the regular rate which an employee receives when he or she works on a holiday or vacation will be regarded as pay for time worked, even though the employee would have received straight time if the employee had not worked on the holiday. Thus, the straight time would have to be included in the regular rate. The extra half-time, however, may be excluded in figuring the regular rate and may be offset against overtime pay due under the Act.
However, care should be taken on how the pay plan is structured. If an employee is entitled to holiday or vacation pay even if the employee works that period, that pay cannot be used to meet the requirement that the premium pay equals or exceeds one and one-half times the regular rate.Thus, if an employee is entitled to vacation pay regardless of whether the employee works or not and the employee receives straight time pay, the employer must pay overtime when the employee works on the straight time pay.
Example (1): An employee whose rate of pay is $5 per hour and who usually works a 6-day, 48-hour week is entitled, under an employment contract, to a week's paid vacation in the amount of the usual straight time earnings ($5 × 48 = $240). The employee foregoes a vacation and works 50 hours during that week. The statutory workweek is 40 hours.
$240.00 = Vacation pay
$250.00 = Regular pay ($5 regular rate × 50 hours worked)
EXAMPLES OF CALCULATING VACATION PAY
Example (1): An employee whose rate of pay is $5 per hour and who usually works a 6-day, 48-hour week is entitled, under an employment contract, to a week's paid vacation in the amount of the usual straight time earnings ($5 × 48 = $240). The employee foregoes a vacation and works 50 hours during that week. The statutory workweek is 40 hours.
$240.00 = Vacation pay
$250.00 = Regular pay ($5 regular rate × 50 hours worked)
$ 25.00 = Overtime pay ((½ × $5) × 10 overtime hours)
$515.00 = Total Compensation Due
The regular rate of $5 per hour is not increased by adding the $240 vacation pay into its computation, and no part of the $240 may be used to offset the statutory overtime compensation which is due. There is no statutory right to the $240 vacation pay or any other sum as vacation pay. This is a matter of private contract.
Example (2): The same employee in Example (1) above is entitled under a contract to 8 hours of pay at a regular rate of $5 per hour for the Christmas holiday. The employee foregoes the holiday and works 9 hours on that day. During the entire week the employee works 50 hours.
$ 40.00 = Idle holiday pay ($5 × 8 hours)
$250.00 = Regular pay ($5 × 50 hours worked)
$ 25.00 = Overtime pay ((½ × $5) × 10 overtime hours)
$315.00 = Total compensation due
The regular rate of $5 was not increased by adding the $40 holiday pay to the computation. No part of the $40 may be used to offset the statutory overtime compensation due.
[If the employment lawyers are not entitled to holiday or vacation pay when they work on those days, then the premium pay received for work on those days is excludable from the regular rate and credited towards overtime pay
$515.00 = Total Compensation Due
The regular rate of $5 per hour is not increased by adding the $240 vacation pay into its computation, and no part of the $240 may be used to offset the statutory overtime compensation which is due. There is no statutory right to the $240 vacation pay or any other sum as vacation pay. This is a matter of private contract.
Example (2): The same employee in Example (1) above is entitled under a contract to 8 hours of pay at a regular rate of $5 per hour for the Christmas holiday. The employee foregoes the holiday and works 9 hours on that day. During the entire week the employee works 50 hours.
$ 40.00 = Idle holiday pay ($5 × 8 hours)
$250.00 = Regular pay ($5 × 50 hours worked)
$ 25.00 = Overtime pay ((½ × $5) × 10 overtime hours)
$315.00 = Total compensation due
The regular rate of $5 was not increased by adding the $40 holiday pay to the computation. No part of the $40 may be used to offset the statutory overtime compensation due.
[If the employment lawyers are not entitled to holiday or vacation pay when they work on those days, then the premium pay received for work on those days is excludable from the regular rate and credited towards overtime pay
Example (3): Same employee in the above examples except that, under the contract, the employee is only entitled to holiday pay when no work is performed. If the employee is required to work on the holiday, instead of receiving the holiday pay he or she receives a premium rate of $7.50 (time and a half) for each hour worked on the holiday. The employee works 9 hours on the holiday and 50 hours during the week.
$250.00 = Regular pay (50 hours × $5)
$250.00 = Regular pay (50 hours × $5)
$ 25.00 = Overtime pay (10 hours × (½ × $5))
$ 22.50 = Holiday premium (9 hours × ($7.50−$5))
The employer is able to take credit for the holiday premium against the overtime premium and the employee is only due $2.50 for overtime ($25 overtime − $22.50 holiday premium). The straight time vacation pay ($9 hours × $5 = $45) is not included in the regular rate or credited against the overtime premium. Thus, the employee is paid as follows:
$250.00 = Regular pay
$ 22.50 = Holiday premium
$ 2.50 = Overtime pay due ($25 overtime − $ 22.50 premium)
$ 45.00 = Holiday straight time
$320.00 = Total Compensation Due
The statute does not require premium pay for a holiday. Since the holiday premium is one and one-half times the established rate for nonholiday work, it does not increase the regular rate because it qualifies as an overtime premium under Section 7(e)(6), and the employer may credit it toward the statutory overtime compensation due.
The statute does not require premium pay for a holiday. Since the holiday premium is one and one-half times the established rate for nonholiday work, it does not increase the regular rate because it qualifies as an overtime premium under Section 7(e)(6), and the employer may credit it toward the statutory overtime compensation due.
Example (4): Same employee as in the above examples, except that the contract calls for $10 (double time) for each hour worked on the holiday.
$250.00 = Regular pay ($5 × 50 hours worked)
$ 25.00 = Overtime pay (10 hours × (½ × $5))
$45.00 = Holiday premium (9 hours × ($10−$5))
The employer is able to take credit for the holiday premium against the overtime pay, so no additional overtime is due ($45 premium > $25 overtime). Thus, the employee is paid as follows:
$205.00 = Regular pay ($5 × 41 nonholiday hours)
$ 90.00 = Holiday pay (9 hours × $10)
$295.00 = Total Compensation Due
Since this holiday premium qualifies under Section 7(e)(6), it is excludable from the computation of the regular rate and may offset against overtime compensation due.
In distinguishing Examples (3) and (4) from Examples (1) and (2), it should be noted that the correct provisions in Examples (1) and (2) called for holiday pay whether the employee worked or not. In Examples (1) and (2), the employee received some pay attributable to the holiday, whether he or she worked or not, and some pay at a nonholiday rate for hours worked on the holiday. In Examples (3) and (4), all the premium pay the employee received for working on the holiday (even though it is double time) was directly attributable to work performed on the holiday.The payment of an additional hour's pay to employees who work a seven-hour shift at the beginning of the change to daylight savings time is treated as a holiday hour and need not be counted as part of the regular rate of pay for overtime purposes. This amount, however, cannot be credited toward any overtime compensation due for the week. But at the end of the daylight savings period, employees working the nine-hour shift are entitled to overtime on the basis of all hours worked in the workweek, including the extra hour worked during the time change