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Non-Exempt Salaried and Vacation Texas

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  • Non-Exempt Salaried and Vacation Texas

    This question confuses me every time I try to ask it, so bear with me...We have several non-exempt, salaried employees who work a lot of overtime during the week. I was told then when an employee with this status takes a vacation day during a week where they will also receive overtime, that I should add salary OT (essentially straight time) to their pay to make them whole. For example:

    EE works Mon-Thurs, 9 hours each day for a total of 36 hours.
    EE takes vacation Friday, 8 hours.
    Total hours for the week = 44
    Employee should be paid 4 hours of straight time in addition to the first 44 hours.

    I've been practicing this but it still doesn't look right to me, I don't understand the reason for adding the straight time. Any words of advice or better explanation would be great!
    Last edited by payrollisevil; 11-14-2012, 12:33 PM.

  • #2
    Overtime is a function of a federal law called FLSA. While some states have their own OT laws, TX is not one of those states. So if we are talking about what is legally required, and nothing else, then for non-exempt employees working for a private sector employer, overtime is hours actuall worked past 40 in the workweek. Vacation is hours not worked and under federal law has nothing to do with overtime. As far as federal law is concerned, there is no such thing as vacation, not in regards to overtime and not in regards to anything else. Vacation is not a federal law concept. Federal law is based on actual hours worked.
    http://www.dol.gov/whd/regs/compliance/whdfs23.pdf

    Now could your company have it's own OT rules in addtion to the official rules that have actual laws associated with them? Sure. Exactly one of my prior employers did this, for a while. I thought it was a bad idea then and I think it was a bad idea now. But that is just me.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Thank you, I appreciate your reply. I think it is bad practice as well, but mostly because no one has been able to explain to me why they are calculating it this way. I am pushing toward removing the salaried, non-exempt status and making those employees hourly, non-exempt. This will alleviate those pesky situations.

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      • #4
        Maybe. Actual law does not care about vacation in context of overtime, so legally there is no difference between non-exempt salaried and non-exempt hourly as far as vacation and overtime is concerned. So whatever you are doing, it is not because the law requires it.

        Taking vacation off the table, if the employer is paying either weekly or bi-weekly, then there is no reason I can see to pay someone non-exempt salaried. If however we are talking a semi-monthly payroll, then legally the non-overtime portion of the payment calculates differently. I have worked for more then one employer where office employees were paid salaried, and factory paid were paid hourly. If you started paying a non-exempt salaried office worker as non-exempt hourly, you would likely offend them, even if they were basically getting the same pay. IMO, pointless but I have seen the reaction too many times to completely discount it. Also, many workforces basically do not work overtime. If you have a semi-monthly payroll with a lot of non-exempt salaried employees who do not work overtime, paying them on a salaried basis starts looking very good. Of course, you have a lot of overtime, you really need a good automated time accounting system no matter what your payment basis is. Another way of saying that the employer gets big enough, they tend to have a good automated time accounting system, and these issues tend to become non-issues since everything is automated. You need good time accounting information for ALL non-exempt employees, period, no exception, and once you have that, a good automated system basically does not care what your payment basis is.
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          My interpretation of your example:

          Because EE is salaried, ER is willing to pay for 40 hours, even though EE only worked 36.

          In addition, ER pays 8 regular hr for vacation. Total paid will be 48 regular hours.

          Could be that my interpretation only works for this illustration.

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