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Final Pay Minimum Wage and OT Florida

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  • Final Pay Minimum Wage and OT Florida

    If our policy is that if you quit without notice (or get fired) your final pay will be minimum wage. During weeks there is OT, I understand it is not paid at the mw rate, but does it have to be paid at their current regular rate (before the reduction) ...that's how I understand 778.108 or can it be an average of their rate while they were employed (is that what 778.400(g)(3) says?)? Thanks for any translation you can offer!

  • #2
    Each workweek stands alone. If you have two workweeks at two separate rates of pay, calculate each workweek separately. If you have a single workweek with time worked at both rates, this becomes a little more problematic. The regulation is really intended for the employee working two jobs with different rates. Theoretically, however, this situation is no different than if the employee got a raise in the middle of the workweek; no recalculation of "regular rate of pay" for overtime purposes would be necessary.

    Not your question, and I hope you don't take this the wrong way, but I think it's really not appropriate to have such a policy. The employee agreed to work at XX and that's what you should pay him, whether he gives a two-week notice or not. Just my $.02.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      No offense taken at all... it's not actually "our" internal policy but that of a client (we serve as a HR resource for them and I get all sorts of scenarios). So I agree 100%. For some reason I thought it was different under the circumstances of it being a final pay week. I always advise not to reduce pay for hours already worked, period. So, as long as they make at lease mw and are paid the extra 1/2 for OT they can reduce the wages for the final week with no violation? (and I'm sure FL doesn't care!) THANKS

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      • #4
        Yes, they can.
        I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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        • #5
          Originally posted by cmbeard View Post
          No offense taken at all... it's not actually "our" internal policy but that of a client (we serve as a HR resource for them and I get all sorts of scenarios). So I agree 100%. For some reason I thought it was different under the circumstances of it being a final pay week. I always advise not to reduce pay for hours already worked, period. So, as long as they make at lease mw and are paid the extra 1/2 for OT they can reduce the wages for the final week with no violation? (and I'm sure FL doesn't care!) THANKS
          In OT week no reductions is allowed, the regular rate is the norm. If the worker worked OT say at $8 per hr, and he failed to follow company policy of providing a two week notice to end his employment, there is no provision to reduce his $8 per hr rate to mw. In non-OT week, yes that can be done, (base on the Klinghoffer rule) however in OT weeks, is not permisible. FL state may not care, as they have no Labor Dept, however, you may be dealing, or your client, with the federal DOL-Wage Hour DIv, who would enforce the $8 per hr or regular rate (last week or not).

          Otherwise the employer may reduce, the pay rate to MW, at any time the worker works OT, at the employer's discretion, on any week the employer wishes it. You may want to call (813-288-1242) the Tampa office of the federal DOL-Wage Hour Div, as they would be the one with resposibility on this issue.
          ========================================

          "A veteran - whether active duty, retired, national guard, or reserve - is someone who, at one point in his or her life, wrote a blank check made payable to The 'United States of America', for an amount of 'up to and including my life.'" (Author unknown)

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          • #6
            Completely different answer from Patty... I'm back at square one. ArmyRet - that's what I always thought the answer to be but I didn't have a reference, but I have never heard of the Klinghoffer rule. I feel better if its more appropriately spelled out in FLSA Patty, we'll just reiterate that its a terrible 'policy' to have! Thanks all for your imput though!

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            • #7
              The workweek is Monday-Sunday. Joe works Monday and Tuesday at his regular rate of $10/hr. On Wednesday, Joe comes in and immediately resigns effective Friday. He works Wednesday through Friday at minimum wage. I see now what your situation is. I sit corrected and I agree that if he works overtime during that workweek, it would have to be calculated using the regular rate of pay.

              Of course, that is a non-issue if the employer doesn't allow Joe to work overtime after he's already submitted his resignation, which is what I might recommend. Or if the employer is going to reduce him to minimum wage, why don't they just accept his resignation immediately?
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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              • #8
                ArmyRetCW3:

                You are using the Klinghoffer decision in an uncommon context. I was wondering if you could provide a citation that uses Klinghoffer to override regular rate of pay (as opposed to minimum wage). All Klinghoffer cited rulings I have read seem to be treated Klinghoffer as specific to the minimum wage calculation only. The following example is from the DOL website, but is a very common usage.

                http://www.dol.gov/esa/WHD/opinion/F...30_05_FLSA.pdf
                During workweeks with no overtime, additional compensation is not due if the regular rate for the workweek yields at least the federal minimum wage under section 6(a) of the FLSA.2 See U.S. v. Klinghoffer Bros. Realty Corp., 285 F.2d 487 (2nd Cir. 1960).
                -----

                For everyone else, Klinghoffer is an interesting and important decision from 1960 for minimum wage purposes. It basically says that it is possible to have nominally unpaid hours in the workweek as long as for each and every workweek the average rate of pay is at least minimum wage. Variations of this issue have gone to court a lot and Klinghoffer has always been upheld on this point. Examples.

                - **** works in an office, is non-exempt salaried and his salary is based on a 35 hour week. **** is sometimes required to work more time, as much as 40 hour weeks, but no actual overtime under the FLSA definition. **** thinks he should be paid extra money for working this non-overtime extra time. The courts do not agree with as long as he is paid at least minimum wage on average each workweek, and Klinghoffer is the cite.

                - Jane is a long haul trucker subject to the Motor Carrier exceptions, meaning no paid overtime per the FLSA law, one of those odd little overtime exceptions. Jane is paid $100/load, but is also required to spend several hours per trip helping to load the truck and do other non driving tasks. Jane wants to get paid for these hours separately. Again, the courts do not agree (per Klinghoffer), at least as long as Jane is paid at least minimum wage (on average) for all hours worked.

                -------

                To cmbeard:

                Labor law is a very big tent with a huge number of odd rules and exceptions. Generally speaking federal law (FLSA) in context of your questions cares about hours worked, minimum wage and overtime. It generally does not care what the rate of pay is as long as these other rules are followed. Your state (FL) arguably cares about very little in regards to labor law. Arguably your state cares much less then the feds do, because the feds at least have laws that they will enforce. FL has a higher then federal MW, but do not even have a DOL to enforce it.

                You should wait for ArmyRetCW3's response. I am not saying that he is wrong, but I will say that he is giving an uncommon answer, and that Patty's answer is convential wisdom as far as labor law goes. Now court decisions can say more then one thing and maybe Klinghoffer does indeed have something to say about "regular rate of pay" calculations and not just minimum wage calcs. However I spent a full hour this morning on line researching this and I am not finding anything supporting ArmyRetCW3's view on this. I would actually like to be proven wrong. I need an article idea for next month, and this would make a good one, give actual supporting citations.

                Past that, the non-existent FL DOL does not care about your employees, but FL courts might. If I was your employee, I would look to the adequacy of the notification of "final check is at minimum wage". This sort of action is not inherently illegal, especially in FL, but if the employee could show inadequate notification (well prior to the work being done), then the judge could decide that a contract law violation occured. In fact, the judge (especially at the small claims court level) could just decide that he does not like you and find for your employee. I have worked for employers who were 100% correct legally and still lost in small claims court.
                "Reality is that which, when you stop believing in it, doesn't go away".
                Philip K. **** (1928-1982)

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                • #9
                  Originally posted by DAW View Post
                  ArmyRetCW3:

                  You are using the Klinghoffer decision in an uncommon context. I was wondering if you could provide a citation that uses Klinghoffer to override regular rate of pay (as opposed to minimum wage). All Klinghoffer cited rulings I have read seem to be treated Klinghoffer as specific to the minimum wage calculation only. The following example is from the DOL website, but is a very common usage..
                  It may be uncommon you, no offense intended, but is a regular way of doing business in my line of work. But I deal with this issue, the Klinghoffer rule, on a weekly basis. I do not claim to be an expert on the Klinghoffer rule, however, this is my full time job, dealing with Wage Hour issues, in an official capacity. And to be clear, of what I am trying to say.

                  In non-OT weeks, if the employer pays the federal MW, not the state MW, the employer has paid in accordance with the FLSA. The federal DOL-Wage Hour has no authorithy to enforce, in non-OT week, any amount over the federal MW. That is what the Klinghoffer rule is all about, which the federal DOL-Wage Hour is required to follow. The employer may pay the regular rate, but under the law, he is not required.

                  Under an employee private suit known as FLSA 16b right contract law may come into place and the employee may be paid the regular rate under contract law. In essence the Klinghoffer rule is what the federal DOL-Wage Hour can enforce in non-OT week.

                  This is what the Klinghoffer rule:

                  United States v. Klinghoffer Bros. Realty Corp. , 285 F.2d 487, 490 (2d Cir. 1960), where the court stated that the: Congressional purpose is accomplished so long as the total weekly wage paid by an employer meets the minimum weekly requirements of the statute, such minimum weekly requirement being equal to the number of hours actually worked that week multiplied by the minimum statutory requirement.

                  Basically, if MW is paid compliance has been met...
                  ========================================

                  "A veteran - whether active duty, retired, national guard, or reserve - is someone who, at one point in his or her life, wrote a blank check made payable to The 'United States of America', for an amount of 'up to and including my life.'" (Author unknown)

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                  • #10
                    ArmyRetCW3:

                    In your first post you state In OT week no reductions is allowed, the regular rate is the norm. May I ask where you are getting that?
                    "Reality is that which, when you stop believing in it, doesn't go away".
                    Philip K. **** (1928-1982)

                    Comment


                    • #11
                      29 CFR 778.108

                      Simple and clear in my every day work of Wage Hour issues.
                      ========================================

                      "A veteran - whether active duty, retired, national guard, or reserve - is someone who, at one point in his or her life, wrote a blank check made payable to The 'United States of America', for an amount of 'up to and including my life.'" (Author unknown)

                      Comment


                      • #12
                        But the OP's question involved paying minimum wage the final week work if a quit without notice occurs. Say paying Bob $10/hr the previous workweek and $6.55/hr this work week. Everyone understands that regular rate is a mathematical calculation used to determine overtime. But the regulation you just cited very clearly states that the amount of wages is determine by the parties, and that the regular rate is mathematical determined as a result of that.

                        I am still not seeing where you are going up with your opinion that paying minimum wage for base pay is illegal in the circumstance as described by the OP.

                        http://www.dol.gov/dol/allcfr/ESA/Ti...CFR778.108.htm

                        As stated by the Supreme Court in the Youngerman-Reynolds case cited above: ``Once the parties have decided upon the amount of wages and the mode of payment the determination of the regular rate becomes a matter of mathematical computation, the result of which is unaffected by any designation of a contrary `regular rate' in the wage contracts.''
                        Federal DOL also has a factsheet on overtime which somehow fails to mention this "rule" that base pay cannot be changed between workweeks.
                        http://www.dol.gov/esa/whd/regs/compliance/whdfs23.pdf
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

                        Comment

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