Patty or cbg

[Whyte Noise]

Question about exempt/unexempt employees

What is the name of your state? Tennessee

Patty, I noticed in another thread here:

https://forum.freeadvice.com/showthread.php?t=278812

You told the poster the following:

There are no "laws" regarding how much you have to be paid, other than minimum wage if you are a nonexempt employee, or $455/wk (federal minimum) if you are an exempt employee.

I went to the Dept. of Labor's website to look up who is considered an exempt employee, and found the cite of the $455 a week pay for salaried employees in order for that employee to be exempt from overtime.

My husband works for a national hotel chain. He's been with this company for 3 years, and we moved here to TN last year as part of a job transfer, a new title, and better pay. He was hired in as the Night Auditor/Night Manager at a rate of $400 per week salary. Now, the kicker is... he would work 50 hours, but only get paid for 40 at $10 an hour. For some reason, they said that their payroll wasn't set up to do salary, just hourly, even though his pay stubs clearly state "salary" on them. So, instead of inputting him $400 a week base rate it was 40 hours @ $10 an hour (for his $400 a week salary), even though he worked 5 10 hour shifts per week for a total of 50 hours per week (11PM - 9AM).

With me so far? Gosh, I hope so.

He was promoted to Front Desk Supervisor earlier this year and his pay rate stayed the same; $400 per week. He had his one year review in June, and received a 4% pay raise for each pay period. So, now he's making $416 per week. Yeah, we're rolling in the dough. He is still working 50 hours a week (7AM - 5 PM 5 days a week), and getting paid $10.40 for 40 hours of work, per his paycheck even though it says in big bold letters SALARY and his hours say "80". (he gets paid every 2 weeks.)

Now... if what you said and what I read on that website are correct, he should be making (as a SALARIED employee) at least $455 per week to be an exempt employee, correct? And if he's not being paid that much, then he is a non-exempt employee and the employer is required by federal law to pay time and a half for the 10 hours of overtime he works each week?

Do I have that right?

I will say that the company is a franchise and independantly owned but still bears the major hotel chains name. Don't know if that will matter or not. I will also say that some weeks he does have 3 days off instead of 2 as well. However, there are times when someone calls out and he's the one left pulling a double shift because of it, and last week and this week so far, he's worked 13 straight days without a day off, with 2 double shifts thrown in there (last Saturday and last Monday). He won't be off until *possibly* Friday this week.

The way I see it, he doesn't meet the exempt status because he doesn't make $455 per week. Otherwise, he'd be under the Administrative Exemption as he meets all other requirements listed on the DOL's website. Since he doesn't meet the exempt status, he should be paid time and 1/2 of his current pay rate for the overtime he works in the weeks he works it.

If I'm correct in what I just said, what, if anything, does he need to do and has his employer been violating federal law for the past 16 months in regards to his pay?


*****Yes, I have insomnia*****

Edited to add: Since his hire date of 06/10/04 he's not clocked in or out on the time clock. As a salaried employee, he was told he didn't need to. Could this be a potential problem for him "if" his employer does indeed owe him any backpay for the past 16 months? Without time records to show his actual start and ending times, all he has are pay stubs showing SALARY, 80 hours per pay period, and $832 in gross wages (which was $800 on the pay stubs before his 4% salary increase). Will those pay stubs be enough "proof" that he wasn't making the $455 per week/$910 per pay period?

Also, when did the $455 amount take effect? In reading the DOL's site I came across a document where it used to be $155 a week, but I saw no dates listed on either that one, or the $455/week one.

OK, I'm going to bed now, I hope.

 

[Whyte Noise]

Found the answer to one of my questions, about when the $455/wk pay level started.

"On August, 23, 2004, the first major change in U.S. overtime law since 1949 went into effect. The controversial revision of the Fair Labor Standards Act, referred to by the Labor Department as the “FairPay” rules, set forth new criteria used to determine overtime eligibility under the new laws."

So, from June 10, 2004 until August 23, 2004 he was a legal, exempt, salaried employee under the $155/week rule. Correct? Only after 09/23 should his pay have been raised to $455 a week to remain exempt or he should have been a non-exempt employee and received overtime compensation?

I've noticed there's been quite a number of views to my post, but no replies. Am I just so wrong and people are being nice and not snickering at me publicly? LOL I admit, I could be interpreting everything totally incorrectly as I'm not up on labor or wage laws at all. Heck, I didn't even know about the $455/week deal until I saw it posted here last night. I don't normally come to this board. Just couldn't sleep and was parusing.

Anywho, I know this is addressed to pattytx or cbg, but if Beth or anyone else has an inkling, go right ahead and post. Even if you laugh at me for idiotic interpretations and tell me I'm completely wrong.

 

[cbg]

Bear with me. As a matter of fact, I have a part time job as a hotel night auditior so I'm quite familar with it, and due to that job I just logged on for the first time since you posted. Please have patience; it is the weekend and we are all volunteers.

The bottom line is that it takes more than being paid $455 per week to be considered exempt, but any employee who is paid less than $455 per week is non-exempt by definition, regardless of whether or not their job duties would otherwise classify them as exempt.

That does NOT mean that it is illegal to pay him by salary; only that he must also receive OT when he earns it.

There IS a way that he is entitled to overtime but not at the rate of time and a half, but I'm going to have to let Patty explain it to you.

 

[Whyte Noise]

Yeah cbg, I know we're all volunteers. I just didn't want people to think I'd only accept responses from you or patty.. I just addressed the post to you 2 because you're knowledgeable.

I understand about the other requirements other than the $455 per week, and I've looked at those on the DOL website. Both as a night auditor/night manager and as the front desk supervisor, his job responsibilities fall under the Administrative exemption catagory as far as I can tell, except for the $455 a week part:

"The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; this he doesn't get

The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; Yes, he does office/non-manual labor and it's directly related to the business operations of the company and the customers (guests) and

The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance. As a management employee and the front desk supervisor he does make "calls" on a daily basis with regard to rates charged, employee duties, etc. I would think these would be considered under "matters of significance"?

He meets 2 of those 3 requirements, EXCEPT for the salary rate outlines, so as long as the salary rate isn't made he's a non-exempt employee entitled to overtime.


They've been treating him as an exempt employee all this time and have not paid him any OT at all, only straight salary, even when he worked 50 hours or more per week. Cripes, he worked 2 doubles (last Saturday and Monday @ 16 hours each for 32 hours in those 2 days) then on Sunday he worked 8 hours (7-3). That's 40 hours right there in just 3 days. Not counting Thurs, Fri, Tues and Wednesday. (Their "week" runs from Thursday to Wednesday). Counting just 8 hours per day that's 32 hours of overtime in one week and no compensation at all, only his straight salary of $416 per week.

 

[pattytx]

At this point, it's getting, not confusing necessarily, but complex. The best thing for him to do is file a claim for unpaid overtime with the state Dept. of Labor. They will contact the employer and investigate and order back pay if applicable (which, it for sure, will be).

Good luck to him.

 

[Whyte Noise]

cbg...

Were you referring to this when you made the statement about him possibly being entitled to OT pay but not at time and 1/2?

"Salary for Workweek Exceeding 40 Hours: A fixed salary for a regular workweek longer than 40 hours does not discharge FLSA statutory obligations. For example, an employee may be hired to work a 45 hour workweek for a weekly salary of $300. In this instance the regular rate is obtained by dividing the $300 straight-time salary by 45 hours, resulting in a regular rate of $6.67. The employee is then due additional overtime computed by multiplying the 5 overtime hours by one-half the regular rate of pay ($3.335 x 5 = $16.68)."

from: http://www.dol.gov/esa/regs/compliance/whd/whdfs23.htm

 

[pattytx]

Yes, that is what cbg was talking about. It is known as a Belo plan. However, in order to get paid under that method, the following criteria must apply:

1. the plan must be agreed to by the employee through an individual contract or collective bargaining agreement;
2. The employee must work irregular hours (with workweeks fluctuating above and below 40 hours)
3. the contract must guarantee a straight-time rate of at least the statutory minimum and an overtime rate of at least 1 1/2 times the regular rate; and
4. the weekly guarantee must be for not more than 60 hours of work.

If the employer could legally pay your husband under this plan, he would have had to be a party to an individual contract. Most employers know virtually nothing about this alternative, but try to use it when they get caught not paying overtime when they should have. It cannot be made retroactive. In my opinion, it's not worth even addressing. I'd just let the state DOL do its thing.