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i don't fully understand salary non-exempt Montana

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  • i don't fully understand salary non-exempt Montana

    i have recently been promoted at my job, gaining status from an hourly employee to salary non-exempt. i suspect that this status has previously caused legal trouble for this company, because i signed a waiver of "overtime calculation acknowledgement." i believe i may have interpreted this waiver incorrectly.

    the waiver states that "the base pay rate...is determined by dividing the..annual salary by 2080 hours (40 x 52 weeks)." this determines the hourly rate to calculate the premium overtime rate.

    it also states "the salary...compensates him/her for all hours worked at his/her base rate pay. ... Overtime is therefore paid... at half time for all hours worked over 40 in a week.

    looking at the statements above, i believed that i would still be paid for total hours worked with half-time overtime (the old paystubs define overtime as time-and-a-half for all hours worked over 40 in a week). how would you guys interpret the statements in this waiver? a friend and i have opposite interpretations of these statements. my friend interprets it as how i think salaried non-exempt wages are calculated...

    i think that salary non-exempt with premium overtime pay is calculated by dividing the total hours worked by the weekly base pay, which determines that week's "hourly" pay. that calculation is then multiplied by one-half to determine the premium overtime pay and that number is multiplied by the hours worked over 40.

    i won't actually know how my salary is divided out until the next pay period, because i will have worked +50 hours each week. i just wanted another opinion on how my wages are to be calculated according to ths waiver. if someone wants to review the full waiver, i'll have it available for a few more days.

    i apologize for the lengthy post...

  • #2
    Honestly, I'd worry less about how the waiver is worded and worry more about how they actually pay you. You can not sign away your right to OT, so even if you interpret the waiver as such, it would not be enforceable. If you have any questions about how you will be paid, I'd ask your supervisor, HR or payroll.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      Actually, you are better off being paid their way than by the fluctuating work week method.

      For example, salary is $20,800 per year. They figure $10 per hour. You work 50 hours, they pay $400 salary plus $50 OT.

      Using the fluctuating work week method, the base salary would be divided by hours worked. $400 / 50 hours = $8.00 per hour base rate, so the OT portion is only $4.00 per hour, times 10 hours = $40, for a total of $440.
      Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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      • #4
        I think we have a mixing of apples and oranges here and I think your employer may be misguided.

        Generally, the method you described is the method of paying overtime premium for salaried nonexempt employees when it is agreed that the weekly salary is intended to cover XX hours worked. However, this does not mean the employer doesn't have to pay 1.5 pay for hours worked in excess of 40. It just means that the hourly rate (to be multiplied by 1.5) is the stated weekly salary divided by the number of hours the salary is intended to cover. But, it also means that you don't HAVE to be paid your "salary" for hours that you don't work.
        http://www.dol.gov/dol/allcfr/ESA/Ti...CFR778.113.htm

        The half-time premium only comes into effect when you are working as a salaried nonexempt employee under the fluctuating workweek method. Again, in this case, there must be an understanding that the weekly salary is intended to cover XX hours per week, that you get the same weekly salary no matter how few hours or how many hours you work (docking is, with limited exceptions, prohibited), with the exception of when you work more hours that the hours for which the salary is meant to cover. Then, and only then, the half-time premium kicks in.
        http://www.dol.gov/dol/allcfr/ESA/Ti...CFR778.114.htm

        IS there an understanding as to how many hours per week the salary is intended to cover? What happens if you work less than 40 hours in a workweek? Or, do you not know yet?
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          as per patty's response, my manager believes that i am to work approx. 45 hours per week. originally we both thought with my promotion that all hours worked over 40 in a work week is strickly half time premium. this was until i read this waiver. i will print the whole thing with hope to help with the interpretation.

          "1ST ASSISTANT OVERTIME CALCULATION ACKNOWLEDGEMENT
          (Except Alaska, California, New Mexico & Texas)

          HR 14.02

          The 1st Assistant Managerís job is to assist in operating an auto parts store in the absence of, or at the direction of the Store Manager. 1st Assistant Managers work a fluctuating number of hours each week. The duties and responsibilities of the 1st Assistant Manager are more fully described in the Job Description for the position.

          The 1st Assistant Manager is a non-exempt salaried position eligible for overtime. As a nonexempt salaried position, the 1st Assistant has salaried benefits including medical, dental, life insurance, vacation, and sick leave. 1st Asst. Managers are also eligible for a bonus based upon store performance.

          1st Assistant Managers are paid overtime according to federal and applicable state law. The salary of a 1st Assistant Manager compensates him/her for all hours worked at his/her base rate of pay. (Hourly associates are only compensated for the hours actually worked.) Overtime is therefore paid to the 1st Assistant Manager at half time for all hours worked over 40 hours in a week.

          Listed below are answers to possible questions regarding the 1st Assistant Manager position.

          Q. What are the benefits of being a salaried nonexempt 1st Assistant Manager versus being hourly?
          A. Salaried nonexempt 1st Assistants are eligible for the following:
          ē Salaried benefits as opposed to hourly benefits
          ē Compensation for days worked versus being paid by the hour
          ē Eligibility to participate in the 1st Assistant Manager bonus program

          Q. If a 1st Assistant misses a day of work and has no vacation or sick leave available, will they be paid for the day missed?
          A. No, the 1st Assistantís salary compensates them for all hours worked at their base rate. If a 1st Assistant chooses to miss a workday and does not have any vacation, sick or personal time coming, they will NOT be paid for that day. This is consistent with our exempt salaried program.

          Q. How is the 1st Assistant Managerís pay rate calculated?
          A. The base pay rate for a 1st Assistant Manager is determined by dividing the 1st Assistantís annual salary by 2080 hours (40 x 52 weeks). This calculation will give the hourly rate which appears on the 1st Assistantís check and which will be used for overtime payments."

          when i read this, i figured that the company defined base pay rate as hourly and that i am compensated for all hours worked at my base rate pay. some of this statement also leads me to think that it could be interpreted otherwise. basically, i don't want to go to my boss' boss and demand backpay if it is not warranted

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          • #6
            I'm still having a problem with this. In order to use the "half-time" overtime rate, you must work a "fluctuating workweek"; however, it is my understanding that you also must not be docked if you don't work at least 40 hours in the workweek.

            The fact that the statement says that you are "expected" to work "about" 45 hours per week would normally mean that your equivalent hourly rate would be your weekly salary divided by 45, not divided by 40.

            I think your employer is combining both methods erroneously. I recommend giving the federal DOL a call and discussing with them. (866)4-USWAGE
            I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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            • #7
              thank you for the assistance! i'll have this figured out yet

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              • #8
                **update**

                ok, i've figured out how the company pays me. they calculate my payroll as "salary with a fluctuating workweek" with fixed regular pay and (therefore) fixed overtime pay. that way, less math is involved when calculating gross wages. In my payroll accounting book (i'm attending class on this stuff) it is one of the alternative methods used to calculate this kind of wage. this pay is not the BELO plan, as my employer and i have not actually agreed on a regular set of hours.

                i still don't like the idea of salary, because the last time i was scheduled for less than 40 hours was over 2 years ago when i was a part time employee. it seems i will lose more money than gain with this promotion

                my new question is still in reference to that fancy contract: am i salary nonexempt as stated in the second paragraph of the document (The 1st Assistant Manager is a non-exempt salaried position eligible for overtime), or am i fluctuating as stated in the first paragraph (1st Assistant Managers work a fluctuating number of hours each week)? is it possible to be both nonexempt and have a fluctuating workweek when the calculations for gross wages are so different?

                i believe the company may have combined both methods of pay erroneously as patty stated earlier, and in doing so, may have caused a $300 discrepency on my paycheck. that is assuming that i can be one or the other, but not both.

                input will be greatly appreciated!!

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                • #9
                  "Fluctuating workweek" is a subset of "salary nonexempt". I still maintain that they're trying to mix apples and oranges.
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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