Human Resource Blog

Exempt Employee Time and a half pay

I have some employees who are exempt but when they work on the weekend we pay them time and a half. During the week they work about 50 hours and recieve a salary. I work in the construction industry so at times these weekend hours are mandatory. The corporate office is questioning our plan. Some other business units pay straight time for their exempt level employees who work on the weekends. So, who is right? Is this a violation of the FLSA?

Yes, this is a violation of the FLSA (the federal Fair Labor Standards Act) and neither plan that you suggest is legal if these workers are employees. (If they are genuinely independent contractors rather than employees, then either arrangement is legal.)

Under the FLSA, an employee is either exempt or non-exempt, depending upon his or her primary work duties. Exempt employees can be Executives, Administrators, Outside Sales, Professionals (like doctors and lawyers) or Computer Pros. Anyone who performs manual labor like carpentry or plumbing is a non-exempt employee.

It is important to note that there is no such thing as exempt duties, or exempt time. The employee is either exempt for every hour he works, or he is non-exempt for every hour he works. Suppose you have an exempt supervisor who fills in as a plumber on weekends. He is either exempt or non-exempt, based on his primary duties. If he is exempt, he is not entitled to additional pay over and above his salary when he works more than 40 hours per week. If he is non-exempt, he is entitled to overtime when he works more than 40 hours in the payroll week, regardless of his duties during those hours. There is no middle ground of *somewhat exempt* or *partially hourly*.

When you treat an exempt employee as if he were hourly, he automatically becomes a non-exempt employee permanently, regardless of his primary duties. In particular, if an employees pay varies from week to week based upon the number of hours worked, he is a non-exempt employee. So by paying these employees straight time or overtime when they work on weekends, you have made all of them non-exempt employees. They are all entitled to overtime when they work more than 40 hours in the payroll week. If one of them files a complaint, the US Department of Labor will require you to pay them overtime for the past 2 to 3 years.

In addition, by varying the amount the employees are paid each week, it appears you are conspiring to break the federal overtime law. The US DOL has a history of levying fines and penalties — up to 3x the total back wages — against companies that do this.  

An exempt employee is entitled to his or her salary each week, regardless of the number of hours the employee works. If the employee works 20 hours, generally he is entitled to the same salary as if he works 80 hours. It does not matter if the hours worked are on the weekend or not. A number of federal cases have shown that even if the exempt employee works in a different capacity on the weekends (such as a restaurant assistant manager working as a waiter on Saturday and Sunday) if the employee receives additional pay, he becomes non-exempt for all hours worked for that employer.