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Salary vs. Hourly-New Jersey New Jersey

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  • Salary vs. Hourly-New Jersey New Jersey

    Hi,

    We just acquired two companies in NJ. I am located in FL. They are currently classifying employees as Salary. However, if those "salary" employees work more than 40 hours on a seven days week they do not pay them OT but if they work less than 40 they get deducted. Is that in compliance?

    MGG

  • #2
    You are over simplifying this. What are the job duties? Industry? CBA? under what circumstances would pay (as opposed to leave) actually be docked?
    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
      You need to first determine if these employees' jobs are exempt or non-exempt.

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      • #4
        The are non-exempt employees. They work at a pharmaceutical lab.
        Ex.
        1>if this employee work only 37hours -> get only 37hours
        2>if this employee work 45hours in weekdays-> get 40hours
        3>if this employee work 45 hours in weekdays and 8hours in weekend -> get 40 hours and 8 hours with the straight rate.

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        • #5
          If they are non-exempt employees then they are entitled to overtime when they work more than 40 hours in a week, regardless of whether they are paid on salary or not. Salaried is only a pay method and has no legal authority of its own. The only thing that matters is whether they are exempt or not.
          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.

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          • #6
            That is what I thought. Now, if they are exempt, can the pay them hourly if they work less than 40 hours a week (like 37)?

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            • #7
              Again, there are a number of exemptions and rules for each one. Employees can not be flipped between exempt and non-exempt from week to week but there are circumstances under which an exempt employee's pay might be legally docked and times when an exempt employee might be paid hourly. What matters is the exemption being claimed and the reason pay is being docked. Why did the employee only work 37 hours? What are the actual employer established workweeks?
              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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              • #8
                This is the explanation I received from the actual person handling HR: For example,

                When they need to see a doctor or need to leave early for their personal thing. Or heavy traffic.

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                • #9
                  If they are non-exempt, then legally they have no expectation of being paid when they do not work. However, they MUST be paid overtime at the rate of time and a half if they work more than 40 hours in a week. If they only work a partial day, they only have to be paid a partial day.

                  If they are exempt, then the ONLY circumstances under which they can be docked a partial day is if the time is attributable to FMLA, or if it is the first or last week of work and they do not work the full week. An exempt employee can be docked a full day's work in a few additional circumstances, but there are NO other circumstances when they can be docked a partial day. They CAN, in 49 out of 50 states and almost always in the 50th, be required to use vacation or sick time in either full or partial days (the exceptions, in CA only, depend on your reading of an unclear (probably deliberately unclear) case law). However, there are no circumstances whatsoever under which an exempt employee is legally entitled to overtime.
                  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.

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                  • #10
                    Thank you cbg for helping me understand.

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                    • #11
                      You're welcome - glad we could help.

                      One thing to keep in mind - non-exempt is the default. It is always legal to pay an employee as non-exempt, even if they qualify to be exempt. The reverse is not true - it is illegal to pay someone as exempt if their job duties do not qualify them as such.
                      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.

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                      • #12
                        OP....IF you are correct that employees are non exempt then it likely follows it is correct to pay them for 37hours if they work but 37 in that pay week, on the flip,side if they work 50 they are entitled to 10 at OT rates.

                        I have no doubt cbg is correct that non exempt is the mandatory default status ..and that employer is not to flip back and forth...and I suspect a retroactive reclassification would not go well for employer seeking to short pay to,employees due to employer error.

                        I have been involved in more than 1 acquisition where the HR practices of acquired firm were a bit sloppy plus as to how they were addressed in acquisition ..and I have no insight as to your specifics .

                        IF you are the successor employer under NJ law you might be on the hook for two years worth of OT wage claims IF said firm bungled it and some worker files for same.

                        I'm not saying they did..and I've been out of the game for a good while ....but I think you want a comment from seasoned independent pro....and in particular if the terms of acquisition require the sellers to clean up loose $ ends you darn well want to be on top of that?

                        Per your post..people get docked a few hours if they are out a few hours...that is OK if non exempt ..and backs up your point that they are non exempt.

                        I might be right..I might be wrong...but you would be smart to get pro to comment on your specifics.

                        PS ..I would agree 100% with other posters ...

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                        • #13
                          Sarcasm blue light ON

                          I am so glad that Raster does not doubt I am correct about the default status.

                          Sarcasm blue light OFF

                          If Raster knew a quarter of what he pretends to know about employment law, he wouldn't need to accept my word for it (though I am gratified that he does - a little more sarcasm there) because he would know such a very basic HR and Payroll 101 fact without having to think about it. That is quite settled, black letter law that can be confirmed in about 5 seconds on your favorite search engine.

                          Raster, do you truly not get that by putting it that way, you cast doubt on the statement?
                          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.

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                          • #14
                            Originally posted by cbg View Post
                            Raster, do you truly not get that by putting it that way, you cast doubt on the statement?
                            Raster needs to be banned again.

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                            • #15
                              The core point remains that non exempt employees as per OP are required to be paid OT if they work more than 40 hrs per pay period and apparently the NJ employers did not do so.

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