Announcement

Collapse
No announcement yet.

California - Hourly, Non-Exempt - Overtime confusion

Collapse
This topic is closed.
X
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • California - Hourly, Non-Exempt - Overtime confusion

    Background:
    -I work in California
    -Paid bi-weekly 26 times a year
    -Hired as a salaried employee
    -Recently classified as an hourly, non-exempt employee
    -Work, on average, 45-47 hours a week.

    Since becoming an hourly, non-exempt worker, I'm required to fill out time sheets to log the number of hours worked bi-weekly.

    In my most recent pay-stub, I was paid a regular rate for the first 80.00 hours and an Over Time rate for 10 hours of work. I was surprised to see that these 90 hours of work equated to the same amount when I was a salaried worker. The 90 hours I put in, when multiplied by 26 (# of pay checks a year), equaled my salary.

    I was under the assumption that I would earn my salary based on a 40 hour work week and would earn extra as a result of my working, on average, 5 hours of overtime each week. When I asked HR and my manager why 90 hours of work equal my salary and not 80, they said that after review, it was determined that my position requires about 45 hours a week to do effectively. As a result, they calculated my rates so that my regular rate at 80 hours + my 10 hours of Over Time equal my salary.

    When asked what would happen if I work less than 90 hours bi-weekly, they told me to fill in extra time in my time sheet as time "on call" to equal 90 hours; this is their way to ensure that I am always paid, at a minimum, my salary. I am never On Call when I leave the office. Essentially, under this system... I am paid the same amount if I work an actual 90 hours as I would if I worked 80 hours. And wouldn't see an increase in my bi-weekly paycheck until I work more than 90 hours bi-weekly.

    Is this practice normal for hourly, non-exempt employees?
    Can my manager determine that my "salary" should be based on 45 hour work weeks (40 hrs regular + 5 hrs OT) and adjust my regular rate accordingly?

    My co-workers were in the same situation where they had to work 90 hours to make salary. However, because they work 40 hours a week and almost never go over, had their regular rates adjusted to be higher so that working 80 hours equaled salary.

    Sorry for being long-winded. I've been searching a bunch of forums, but didn't see anything like this. Thank You SO much for reading and thank you in advance if you have ANY input!

  • #2
    The following is from the CA-DLSE manual.

    http://www.dir.ca.gov/dlse/Manual-Instructions.htm

    49.1.5 Salaried Non-Exempt Explicit Written Agreement No Longer Allowed. In the past, California law has been construed to allow the employer and the employee to enter into an explicit mutual wage agreement which, if it met certain conditions, would permit an employer to pay a salary to a non-exempt employee that provided compensation for hours in excess of 40 in a workweek. (See, Ghory v. Al-Lahham (1989) 209 Cal.App.3d 1487, 257 Cal.Rptr. 924). Such an agreement (backing in the regular rate) is no longer allowed as a result of the specific language adopted by the Legislature at Labor Code 515(d). To determine the regular hour rate of pay for a non-exempt salaried employee, one must divide the weekly salary paid by no more than forty hours.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

    Comment


    • #3
      If I reviewed a salaried, EXEMPT employee's job and found that it did not meet the requirements to be exempt, I would change that person to non-exempt. If the person was converted to hourly, as is the case here, I would do precisely what the company has done -- take the exempt salary and the average hours worked per week and calculate an hourly rate that, with the average overtime worked (and now paid at time and a half), would produce the same weekly cost to me as it had in the past.
      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.

      Comment


      • #4
        Originally posted by RPL View Post
        Is this practice normal for hourly, non-exempt employees?
        Can my manager determine that my "salary" should be based on 45 hour work weeks (40 hrs regular + 5 hrs OT) and adjust my regular rate accordingly?
        Just to be clear, in CA an employer cannot base a Non-Exempt employee's salary on a 45 hour week because CA-DLSE says that they cannot. If you file a wage claim, the employer is in violation of CA rules (for now).

        However, the employer can legally get their calculator out, do the sort of calcuation that Scott describes, and determine a 40 hour a week salary that once 5 hours OT is worked creates a gross wage which ends up exactly where you are now. One method is legal and one method is not, but both methods can give exactly the same answer, and the employer just has to use the correct method on a go forward basis to stay legal. The Non-Exempt rules are that you have to be paid minimum wage and you have to be paid overtime. Past that (on a go forward basis), the employer can set the base salary to pretty much anything they want, absent a contract or CBA.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

        Comment


        • #5
          Thank You for your Incite!

          DAW, Scott.

          Thank You both for your incite and helping to clarify laws around this issue. It's put me at ease a bit. As a non-HR type, this really lowered my moral given that everyone else was based on 40.

          Thank You, guys!

          Comment


          • #6
            California labor law attorney

            What has not been addressed I don't believe, is the fact that you may be entitled to past overtime, interest, and penalties since your employer apparently now concedes you are non exempt and assuming your job duties have not changed or other components relating to exempt status.
            Walter

            www.California-Labor-Law-Attorney.com
            "Wage and Hour Class Action Attorneys"

            Disclaimer: The above correspondence does not constitute legal advice nor establish an attorney-client relationship. You should seek the advice of independent legal counsel before relying upon, acting upon or not acting upon any information contained in this correspondence.

            Comment


            • #7
              As pointed out, you may be able to seek reimbursement of unpaid overtime wages for the last 3 years (if you file with the DLSE) or 4 years (if you file a civil action) for the overtime hours worked in excess of 8 in a day or 40 in a week, plus interest and potential penalties.

              If there are other employees who worked in the same or similar capacity as you who were also reclassified, you and your fellow employees may be able to seek recovery as a class action.

              For your nearest DLSE office see http://www.dir.ca.gov/dlse/Cal-CitiesB.asp
              Last edited by cbg; 03-08-2008, 06:04 AM.
              J.E.B. Pickett
              Wynne Law Firm
              California Wage & Hour Class Action Attorneys.
              877-352-6400
              www.wynnelawfirm.com

              Disclaimer: This response and any materials or content provided by this response are for general informational purposes only and should not be relied on or considered as legal advice. Under no circumstances does this informational response, directly or indirectly, establish or intend to establish an Attorney-Client relationship.

              Comment


              • #8
                California labor law

                Also, there are limitations on what the labor board can do (other than not claim the 4th year for unfair competition). You should be aware of these limitations when considering whether to go the labor board or a private attorney.
                Walter

                www.California-Labor-Law-Attorney.com
                "Wage and Hour Class Action Attorneys"

                Disclaimer: The above correspondence does not constitute legal advice nor establish an attorney-client relationship. You should seek the advice of independent legal counsel before relying upon, acting upon or not acting upon any information contained in this correspondence.

                Comment


                • #9
                  JEB, please remove your address and phone number from your signature. The link to your website is fine.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

                  Comment


                  • #10
                    Originally posted by RPL View Post
                    Background:
                    -I work in California
                    -Paid bi-weekly 26 times a year
                    -Hired as a salaried employee
                    -Recently classified as an hourly, non-exempt employee
                    -Work, on average, 45-47 hours a week.

                    Since becoming an hourly, non-exempt worker, I'm required to fill out time sheets to log the number of hours worked bi-weekly.

                    In my most recent pay-stub, I was paid a regular rate for the first 80.00 hours and an Over Time rate for 10 hours of work. I was surprised to see that these 90 hours of work equated to the same amount when I was a salaried worker. The 90 hours I put in, when multiplied by 26 (# of pay checks a year), equaled my salary.

                    I was under the assumption that I would earn my salary based on a 40 hour work week and would earn extra as a result of my working, on average, 5 hours of overtime each week. When I asked HR and my manager why 90 hours of work equal my salary and not 80, they said that after review, it was determined that my position requires about 45 hours a week to do effectively. As a result, they calculated my rates so that my regular rate at 80 hours + my 10 hours of Over Time equal my salary.

                    When asked what would happen if I work less than 90 hours bi-weekly, they told me to fill in extra time in my time sheet as time "on call" to equal 90 hours; this is their way to ensure that I am always paid, at a minimum, my salary. I am never On Call when I leave the office. Essentially, under this system... I am paid the same amount if I work an actual 90 hours as I would if I worked 80 hours. And wouldn't see an increase in my bi-weekly paycheck until I work more than 90 hours bi-weekly.

                    Is this practice normal for hourly, non-exempt employees?
                    Can my manager determine that my "salary" should be based on 45 hour work weeks (40 hrs regular + 5 hrs OT) and adjust my regular rate accordingly?

                    My co-workers were in the same situation where they had to work 90 hours to make salary. However, because they work 40 hours a week and almost never go over, had their regular rates adjusted to be higher so that working 80 hours equaled salary.

                    Sorry for being long-winded. I've been searching a bunch of forums, but didn't see anything like this. Thank You SO much for reading and thank you in advance if you have ANY input!
                    Did your employer go back and pay your back overtime when you were considered exempt assuming your duties did not change?
                    Walter

                    www.California-Labor-Law-Attorney.com
                    "Wage and Hour Class Action Attorneys"

                    Disclaimer: The above correspondence does not constitute legal advice nor establish an attorney-client relationship. You should seek the advice of independent legal counsel before relying upon, acting upon or not acting upon any information contained in this correspondence.

                    Comment

                    Working...
                    X