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Thread: Overtime for Salaried Employees ? Michigan

  1. #1
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    Default Overtime for Salaried Employees ? Michigan

    What is the rules about overtime for Salaried employees? I'm salaried at 50 Hrs per week and there has been many, many weeks where I've worked 55-60 hrs per week. Normally I wouldn't think too much about it but now my bosses are saying that if I don't work the required minimum of 50 hrs a week they will start pro-rating and docking my pay...

    Do they have the right to dock my pay without compensating me for the hrs that I've worked over the hrs I was salaried at or am I just gonna get the short end of the stick on this one?

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    pizzaguy75: What is the rules about overtime for Salaried employees? I'm salaried at 50 Hrs per week and there has been many, many weeks where I've worked 55-60 hrs per week. Normally I wouldn't think too much about it but now my bosses are saying that if I don't work the required minimum of 50 hrs a week they will start pro-rating and docking my pay ...

    If you are a salary exempt employee, your employer can not legally pro-rate or dock your pay if you refuse to work 50+ hours per week vs. 40 hours a week. Your employer can, however, discipline or fire you.

    If you are a salary, non exempt employee, you must be paid time-and-a-half for all hours worked in excess of 40 hours per week. This is true even though you are paid on a salary basis vs. normal hourly basis.

    Whether you are are a salary exempt employee or a salary, non-exempt employee is based entirely on your job duties.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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    Regardless of whether you are exempt or non-exempt, you can be required to work as many hours as the employer finds it necessary for you to work. The only question is whether you have to be compensated for additional hours.

    If you are exempt, then there are no circumstances whatsoever in which you are entitled to a single penny over and above your regular salary. I differ slightly with Barry, however, with regards to docking/pro-rating; it would depend on what time you were not working and for what reasons. There ARE a very few circumstances under which an exempt employee can be docked. You can, however, be legally disciplined up to and including termination for refusal to work the hours your employer demands.

    If you are non-exempt, you must be paid overtime for all hours over 40 that you work, but you can legally be docked for any time at all that you do not work, regardless of reason. Again, you can be disciplined or fired for not working the hours the employer schedules you for.

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    How do you find out if you're exempt or not exempt? Because I have no clue what you're even talking about...

    If it helps I am the Store manager of a Pizzeria.

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    The following are the federal Exempt classification rules. Take a look at the Executive classification.

    http://www.dol.gov/esa/regs/complian...irpay/main.htm

    The following are the federal Exempt Salaried rules. The docking rules CBG mentioned can be found there.

    http://www.dol.gov/dol/allcfr/ESA/Ti...CFR541.602.htm
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    Ok so if I am understanding all this correctly.
    I am considered an Exempt Employee and there is no way I can be compensated for working over the required amount of hrs but in the same instance they can't dock my pay when I'm still putting in a full work week but just falling short of the "required 50" that they would like me to work because I'm still working 6 days a week and not missing days or anything.
    They can however if they so choose discipline me for not meeting my 50 hrs but they can't dock my pay.

    So have I understood everything correctly?

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    I think you have accurately stated the rules for a salaried exempt worker, but are you a salaried exempt worker?

    Notwithstanding your title as Pizza Store Manager, do you spend more than 50% of your time managing the business, supervising employees, hiring and firing employees, etc. If not, you may very well be non-exempt and entitled to time-and-a-half pay for those hours you work in excess of 40 hours per week.

    My point: Your actual job duties vs. your job title dictate whether you are exempt from overtime or not. Many "managers" (particularly those in the food service industry) are nothing more than glorified productions workers. Without knowing the specific tasks you perform in a given day, week, or month, it's hard to say whether you should be receiving overtime or not.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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    While I know that in all reality I don't spend over 25% of my time managing the store and employees and such I do know that my Bosses will say that based on my Position I am suppose to be spending 100% of my time managing the business and making sure everything is done properly.

    I've had my entire staff anywhere from 1 yr + to almost 3yrs so none of them need any constant training or supervising and almost every single one of them can run the store themselves and do so quite frequently while I clean things to keep up the appearance of the store.

    I appreciate everyones help in this matter and I guess should they decide to call me down to the office for a meeting I'll specifically ask them if they consider their Managers "Exempt or Not-Exempt" Employees and then based upon their response tis how I'll respond but at least now I know that I'll have a leg to stand on with the threat of docking my pay and how they can't legally do that.

    Once again thanks to everyone that helped.

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    Final Comment: One of the largest burger chains in the country recently tried to argue that its managers were exempt workers. However, upon careful reflection of its managers' actual work duties (some of which were indeed managerial, but the majority of which centered around operating the cash register, making bank deposits, working the fry station when 'regular employees' were busy, etc), it was clear that the "managers" were really non-exempt employees. The managers sued and were compensated for their back overtime. I have purposefully redacted the burger chain's name; but if you are so inclined, you can google for the details.
    Last edited by BSPCPA; 07-15-2007 at 09:21 PM.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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    A minor typo there, Barry, but I understood what you meant.

    There is a chain of convenience stores here (and in Canada) that will remain unnamed.

    Many years back, before the change in FLSA called Fair Pay, I went to one at 5 AM and got some gas and a coffee. The manager was there.

    I left work at 3 PM, swung by the C-store to get a sandwich and soda. The manager was there.

    I drove to New Hampshire and back that night, dropping by the C-Store at 11 PM. The manager was there.

    I commented about how he must be raking in lots of overtime and he replied that he was salaried.

    I never again went to any of that chain's C-stores. It is possible (unlikely) that the manager was properly classified as exempt and worked to death. My guess is, they used the exemption to avoid overtime. Either way, I won't be a customer.
    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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    ScottB: A minor typo there, Barry, but I understood what you meant.

    Thanks for pointing it out. I will edit my original post so others will not be confused.
    Barry S. Phillips, CPA
    www.BarryPhillips.com

    IRS Circular 230 Disclosure: This response is intended to provide general information and written for educational purposes only. It does not establish a client relationship. This communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to any party any matters addressed herein.

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