April 14 - 20, 2010
AVENTURANEWS.COM
Are you properly paying your employees? BY JEFFREY M. GOODZ Determining the Overtime Rate Over the last two months we explored which employers are covered by the Fair Labor Standards Act (“FLSA”), which requires that certain employees be paid a minimum wage, and be paid time and onehalf of their regular rate of pay (overtime compensation) for all hours worked in excess of 40 in a week, and fundamental causes of liability under the FLSA. In this article we explore employer misconceptions affecting the amount an employer must pay an employee for his overtime compensation. One of the most common misconceptions is that an employer does not have to include a shift differential in its calculation of overtime compensation. Certain employees who work less desirable shifts, such as the graveyard shift, are paid at a higher rate than their co-workers (shift differential) as incentive to get them to work those less appealing shifts. The calculation of time and one-half for such an employee must be based upon his/her actual rate of pay, not the rate of pay given to the other employees working the more desirable shifts. So, for example, if a nursing assistant works the 11 p.m. to 7 a.m. shift, and is paid $10.00 per hour while her daytime counterparts are only paid $9.00 per hour, the overtime compensation for the assistant working 11-7 is not based on $9.00 per hour, but $10.00 per hour. A second common misconception is that an employer does not have to include commissions or bonuses in the overtime calculation. To the contrary, commissions
must be included as part of an employee’s regular rate of pay when calculating overtime compensation due to an employee. A discretionary bonus for going above and beyond the call of duty need not be included in a calculation of overtime compensation. A non-discretionary bonus given to an employee who meets certain goals or requirements, however, must be included. This is a particularly important misconception which could result in substantial liability since oftentimes employees make far more in commissions and bonuses than they do in regular pay. A third misconception on the part of employers is that if they elect to pay employees a salary, as opposed to an hourly rate, for all hours worked, then the employer has paid the employee all that he is entitled to even if the employee works more than 40 hours in a given week. In truth, however, the employee is still entitled to overtime compensation for any hours over 40. Because the employee has been paid a straight salary for those overtime hours, however, he would only be entitled to half time for each hour over 40. The importance of ensuring that employees are being paid properly cannot be underscored. Not only is a prevailing employee entitled to two times their unpaid compensation and attorney’s fees as damages, the FLSA permits individual liability against business owners and/or managers. Employers experiencing wage and hour issues, or any other employmentrelated issues, should not hesitate to consult an employment lawyer. Jeffrey M. Goodz is an employment lawyer with the employment law firm of Remer & Georges-Pierre, PLLC located at Biscayne Centre, 11900 Biscayne Boulevard, Suite 288, North Miami, Florida 33181, (305) 416-5000.
www.communitynewspapers.com ATTORNEY Y / ABOGADO Alll Typess off Cases In Spanish & English G. WALTER R ARAUJO 102 East 49 Street, Hialeah, FL 33013 • walter@gwaraujo.com OFF: (305)231.9281 FAX: (305)698.7251
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