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Thread: Flexpay - Is this legal or not? Kentucky

  1. #1
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    Default Flexpay - Is this legal or not? Kentucky

    I currently work for a vending company in the kitchen. Let me first start off by saying that the ad that I responded to from Indeed stated that I would start off making $12 per hour. This did not say "up to" $12, it said "Starting at $12 an hour!" and I have a screenshot of this. When I interviewed, I was told I would only be getting paid $11 per hour for three months and I would receive $12 if I did not accept the insurance they offer.

    Secondly, they have this thing they call "flexpay". This states that if you work less than 40 hours in your work week, you will receive 40 hours of pay no matter what. If you work anything over 40 hours per week, you will be paid at your normal rate for the 40 hours and minimum wage ($7.25 in KY) for the overtime.

    Our schedule is 8 a.m. - 5 p.m., Monday through Friday with one unpaid thirty minute break that we clock out for. This means we are scheduled for 9 hours each day. After the break is taken out, that is 8.5 hours each day. At the end of the week, we will have totaled 2.5 hours of overtime. If we work our normal scheduled hours we are set up to work overtime each week,.

    This type of work requires that you stay until the work is finished, causing us to stay past our scheduled hours almost everyday. Some of these are 11 hour days. We are typically getting 5-6 hours of overtime each week, all paid at $7.25 per hour. This past week I worked 52 hours. On Friday, I clocked in at 41 hours and worked for 11. That 12 hours will be paid at minimum wage.

    The owner is well aware of our situation in the kitchen. We are horribly understaffed. There is one chef who does not assist us in putting the food together, he is only there to make the food we use. I work with one other person. The two of us are expected to make between 400-700 pieces of food each day. This food preparation takes a lot of time and cannot be completed by two people in the time we are given. When I first started, we had three people (including myself) and would usually get off between 4:30 and 5. This was better than what we are doing now, but even then we were still getting overtime each week.

    To summarize, my boss offers "flexpay" where we get paid for 40 hours if we work less than that, but receive minimum wage for any overtime worked. I have never once worked below 40 hours.

    This business is located in Louisville, Kentucky.

    Can someone explain if this is legal to do? I am wanting to confirm this before I try and file a report. If so, any tips on how I can go about reporting this? Thank you very much.

  2. #2
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    It is not legal. Hours worked over 40 in a week MUST be paid time and a half. He can legally pay you this "flextime" though that is not required, but it does not get him out of the obligation to pay overtime when someone works over 40 hours in a week.

    The "paying $12/hour" is an advertisement and doesn't rise to the level of a contract-that won't get you anywhere. But the facts you've given should be a slam dunk on the overtime issue.

    Before you file, gather all your records of the hours you have worked-if you aren't keeping your own log of those already, you need to start.

  3. #3
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    Sounds like they are trying to use a modified "Belo plan" option under FLSA: http://www.payroll-taxes.com/articles/belo-plans but doing it incorrectly or a nonexempt salaried basis (fluctuating work week) https://www.law.cornell.edu/cfr/text/29/778.114 and possibly doing it correctly. I don't use either but know they exist and can be used legally if done correctly.

    You might read through those links and see if either applies. In essence your weekly salary is 40*$11 which is guaranteed whether you work 40 hours or not .... and since they are paying $7.25 per OT hour which is more than 1/2 your $11, it would be hard for them to fall below the 50% of regular rate of pay RRP for the workweek. I could mathematically figure out how many hours you would need to work to get your RRP to $14.50 (around 30 hours, but you say you never work less than 40, so your RRP is not ever going to get that high)
    Last edited by hr for me; 09-21-2017 at 07:36 AM.

  4. #4
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    Sorry for the really late response, but thank you guys! This is really helpful and I think I am going to report them.

  5. #5
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    Update: I have reported this business to the wage and labor division of Louisville and they have begun to investigate them. Again, thank you for your help! I probably wouldn't have reported them if I didn't get a response to this post.

  6. #6
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    You are very welcome.

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