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Non-exempt vs exempt
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Non-exempt vs exempt
Discuss employment-law issues such as family leave, overtime, disabilities law, harassment, immigration and termination.
I have a few questions on the fair labor law as it pertains to overtime.
I work for a rent-to-own store as an assistant manager. My main responsibility is sales. I was hired on for an annual salary
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Forums » Topic Forums » Legal Forum » Non-exempt vs exempt
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Non-exempt vs exempt
posted at 6/3/2009 6:32 AM EDT
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Posts: 4
First: 6/3/2009 Last: 6/3/2009 |
I have a few questions on the fair labor law as it pertains to overtime.
I work for a rent-to-own store as an assistant manager. My main responsibility is sales. I was hired on for an annual salary based on a 50 hour work week. Most weeks I work 55 or more hours. I have been classified as an exempt employee. I receive Chinese overtime for hours over 40/wk. I have been doing research to determine if my position qualifies as non-exempt. I spend the majority of my time performing the same functions other employees do, such as sales, merchandising, answering the phones, doing deliveries on the truck, etc. I would say atleast 75% of my time is performing these non-management tasks. I do not have authority to hire or fire. I do not make work schedules, determine who does what tasks, and rarely make an executive level decisions. The store manager does all the "executive" tasks, opens and closes the store(I am a keyholder but rarely open or close). He is here each day I am here, with the exception of an occasional afternoon or full day off. Am I exempt or non-exempt under Fair Labor Laws? Do I deserve to be compensated for the true overtime I have worked? My co-workers, in non-management positions, are also working the same amount of hours(55+), are salaried based on 50 hours, and also classified exempt receiving Chinese overtime for hours over 40. Are they exempt or non-exempt under Fair Labor Laws? Do they deserve full overtime pay? Thanks in advance for your help. I am planning on getting a lawyer if there is adequate evidence that I should be non-exempt, |
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Non-exempt vs exempt
posted at 6/3/2009 7:09 AM EDT
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
These forums are intended for employers, not employees.
If you feel that you have sufficient cause, by all means run this by an attorney or simply visit your state's wage and hour office of the state's Department of Labor. |
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Non-exempt vs exempt
posted at 6/3/2009 8:10 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
What is your hourly rate of pay? By paying you overtime, it sounds like they are treating you as non-exempt. If they were truly treating you as exempt, they would owe you NOTHING for hours over 40.
Now the question would be is the overtime premium amount they are paying you correct? Only if the overtime premium is 1/2 your regular rate of pay. It is possible they are using fluctuating workweek (I think this might be what you mean by chinese overtime?). You might read through the following article to see if it applies: http://www.payroll-taxes.com/articles/fluctuatingWorkweeks.html If you think they are applying that incorrectly, I would first ask for clarification by your payroll dept and then secondly tile a claim with your state wage/DOL. |
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Non-exempt vs exempt
posted at 6/3/2009 8:12 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
hrbth -- "chinese overtime" is the slang name for the fluctuating workweek calculation in the article I posted. Honestly, I don't know any employers that call it chinese overtime, but many times employees do. |
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Non-exempt vs exempt
posted at 6/3/2009 8:14 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
And here is what the state of Texas has to say about this method:
"If an employee is paid a fixed salary each workweek for hours that vary up and down from week to week, the employer may use an overtime calculation method authorized in 29 C.F.R. 778.114. This method is called the "fixed salary for fluctuating workweeks" form of computing overtime; this is the method that some companies in the past used to refer to informally as "Chinese overtime". It is easily the most favorable method for employers of computing overtime, but certain requirements have to be met. Many employers favor it because it results in a diminishing regular rate, and thus diminishing overtime pay, the more overtime hours there are in a workweek. For the same reason, many employees do not like this method. Moreover, the regular rate varies under this method from week to week, so some employers and employees do not like the unpredictability of this way of computing overtime pay. To use this method, the employee must have a work schedule with fluctuating hours, i.e., not be on a fixed schedule, and must be paid a fixed salary that is meant to be straight-time compensation for all hours worked in a workweek, whether the employee works less than or more than 40 hours per week. With almost no exceptions, no reduction in the salary may be made for short workweeks. In addition, the salary must be large enough to ensure that the regular rate will never drop below minimum wage. In such a situation, the regular rate is determined by dividing the fixed salary by the number of hours worked that week. Now, here's where the importance of this overtime method comes in: since the fixed salary is already deemed to compensate the employee at straight time for all hours worked, any overtime hours only need to be paid at "half-time", instead of time and a half. Remember, the employee has already been paid straight time by virtue of the salary, and the straight time is only paid once, so the overtime hours will be paid at half the regular rate, thus bringing the employee up to time and a half. In workweeks in which the overtime is high, the regular rate will be low, and the employer will enjoy a lower per-hour overtime cost. The drawback is that if work is slow, and the employee is only working 25 or 30 hours per week, the fixed salary must still be paid. Useful examples of how to apply this method are found in 29 C.F.R. 778.114.' |
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Non-exempt vs exempt
posted at 6/3/2009 10:03 AM EDT
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Posts: 1103
First: 3/16/2007 Last: 8/19/2011 |
rruperts explanation of the fluctuating work week salaried non-exempt method of pay is accurate. I simple terms it allows an individual to be paid a salary and realizing that hours fluctuate also pay them a sliding scale overtime for hours worked in excess of 40 in a week.
The practice as understood by the OP is regulatorily compliant. the advantage to the employer is that the sliding scale of overtime reduces the overtime rate for each hour of overtime worked. In essence the more you work the less you get paid. I have seen overtime rates as low as 16%, instead of the customary 50%, when using the fluctuating method. The challenge is that DOL doesn't state how much the hours must fluctuate, only that they do fluctuate. |
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Non-exempt vs exempt
posted at 6/3/2009 12:49 PM EDT
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Posts: 4
First: 6/3/2009 Last: 6/3/2009 |
I am scheduled for 50 hours per week every week, but I am often required to work longer hours to get the days activities completed. So my work hours fluctuate up, if any.
My base salary is 30k. Based on my pay stubs, the first 40 hours I am getting paid $13.12 per hour. Then I am getting paid anywhere from approx $5 per hour for 10-12 hours OT, $4.80 for 13-16 OT, and $4.55 for 16+ hours OT. My "OT" pay is classified on my pay stub as "WOT"-work over time. |
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