I have recently started looking into our pay practice for a specific group of employees and this has raised some concerns.  I would appreciate any feedback on how things are currently being done.  Sorry this will be long: 

We have a two groups of employees that are Service Technicians and are both paid differently.  One used to be viewed as a separate company which is no longer the case.

Group 1 - Located off-site around the country and are based out of their homes.  They receive a base rate of pay for 40 hours a week regardless of whether or not they work.  When they work or are at a job site, they receive a premium of $6.25 in addition to the base rate.  None of the hours spent at hme and paid for accumulate toward 40 hours for overtime.  All worked hours and travel hours accumulate toward 40 worked hours for overtime calculations.  Is it okay to exclude the time paid while at home and "not" working from overtime?

 Group  2 - Also located off-site.  These guys are only paid when working (at a job site).  They are paid daily overtime, any over 8 in a day.  However, all their travel time is paid at a straight time rate and does not count in the accumulation of 40 hours for overtime. 

 Both groups receive an hour of pay for every report completed.  Reports are done upon the completion of the job and this time is always paid at straight time.  Not counted as worked hours.

Both groups also also a flat payment of $85 a day when international travel is required.  This is not a per diem, it is additional compensation for working out of the country.  This is not calculated as part of the "regular rate" or "overtime rate".

I'm concerned some of these practices are not in compliance with the FLSA.  Your comments are appreciated. 

Whatever else happens, they need to make 1.5x minimum wage for all OT work and no less than minimum wage for all ST work.

Let's say that someone in group 1, whose pay plan strikes me as odd, worked 50 hours in a week.  Would their total pay be (40xMinium)+(10x1.5xMinimum) or greater?  If not, you have potential for a problem.  I can never remember the name of the pay scheme that this sounds like and this doesn't sound exactly like that scheme.  Whatever it's called, it does have some twists.  I avoid such complications.  Can you tell us exactly what the base pay is for Group 1?

In group 2, let's say someone works 5x 7hour days for a total of 35 hours, and then another day for 10 hours for a total of 45 hours.  That person is an hourly employee and they are entitled to no less than 5 ohurs of OT.  If I understand your plan right, it sounds like you are saying they are paid only for 2 hours of OT.  That would definitely be a problem.

We will start with group 1:

The individual might have a base rate of $15.00/hr.  So if they are at home with no job scheduled they receive 15.00/hr. for that time.  (8 hrs a day up to 40 hrs a week).  If they are called to a job they would receive the $15.00 plus $6.25 for all "worked and travel" hours.  The at home hours are what I would view as on-call time.  These guys are free to do whatever they want (paint the house, mow the grass), but when called for a job they go.  The way it has been explained to me, only the worked & travel hours accumulate towards 40 hours for overtime.  I know that on-call time can be unpaid time depending on how much freedom the individual has, but since we are paying them, should it be counted in calculate the "overtime rate"?

 Group 2 - This one scares me the way it is currently being paid.  My biggest concern here is that travel time is not being counted as "worked" hours.  It is being paid, but always at a straight time rate.  They get daily overtime on "worked hours" over 8 in a day and Saturday is paid at 1.5 and Sundays are at 2x.  So if the 7 hrs a day for 5 days was M-7 it would all be straight time and any hours worked on Saturday if that is the 10 would be 1.5.  If the 10 was a day M-F they would have 2 hrs OT for that day and 1.5 for any Saturday hours. 

 I know this is as clear as mud.....

Group 1 - Here is an example:  Employee makes 15.00/hr M-F 40 hours whether or not he actually does any work.  I guess this could be viewed as on-call time.  He is free to do anything he wants during this time, as long as he can be reached and go to a job when needed.  When working, they get an additional 6.25 an hour for all "worked and travel" time.  So if they had worked hours over 40 they would get overtime.  Based on what I have read, the on-call hours aren't necessarily compensible since they can do pretty much whatever they want, but since we do pay them, should this be considered "worked" time or does it just need to be included in the calculation of the "overtime rate"?

Group 2 - What I am mostly concered about here is they way travel trime is treated.  It is always paid at a straight time rate regardless of how many hours a person has "worked".  They get 1.5 on any hours over 8 and then any time on Saturday is 1.5, Sunday is 2x.  So in your example if they worked 5 - 7 hour days M-F that would be 35 ST hours and then if the 10 were Saturday it would be 10 at 1.5. 

cjus10200:

Group 1 - Here is an example:  Employee makes 15.00/hr M-F 40 hours whether or not he actually does any work.  I guess this could be viewed as on-call time.  He is free to do anything he wants during this time, as long as he can be reached and go to a job when needed.  When working, they get an additional 6.25 an hour for all "worked and travel" time.  So if they had worked hours over 40 they would get overtime.  Based on what I have read, the on-call hours aren't necessarily compensible since they can do pretty much whatever they want, but since we do pay them, should this be considered "worked" time or does it just need to be included in the calculation of the "overtime rate"?

Group 2 - What I am mostly concered about here is they way travel trime is treated.  It is always paid at a straight time rate regardless of how many hours a person has "worked".  They get 1.5 on any hours over 8 and then any time on Saturday is 1.5, Sunday is 2x.  So in your example if they worked 5 - 7 hour days M-F that would be 35 ST hours and then if the 10 were Saturday it would be 10 at 1.5. 

Someone will have to help us out here on 1.  As you describe it, this is like a form of payment that I believe is legal but I have managed to avoid it so I don't know much about it.  I can't even recall the name of it.  If I recall correctly, you get to pay the  OT hours at a ST rate as long as the ST rate is at least 1.5x minimum, which yours is.  Someone who directs us to the name of this comp plan will give you what you need to search on the DOL page for the ins and outs.

For case 2, a lot depends on why they're travelling and how they're travelling.  "Hours worked" becomes the critical term.  Some travel is work, some isn't.  Take a look at what the DOL says about compensating hourly employees who travel and that will answer your questions.