We have cut everyone hours to 32 per week due to a drop in sales.  We are paid on a semi-monthly payroll and pay ee's up to the day.  My question is:

1. some pay periods we have 72 hours worked and others we have 88 hours worked but we are only paying the ee's for 70 hour pay periods I know FLSA states that you pay for all hours worked but we did an average and sometimes they will earn more or less and that's where we got the average to just pay 70 hours can anyone tell me if this is leagal? CA&GA

2. We had some ee's work overtime based on the short work weeks do I pay overtime anything over 40 or anything over 32 and these ee's are based in california.

 

 

 

 

ddnicole:

We have cut everyone hours to 32 per week due to a drop in sales.  We are paid on a semi-monthly payroll and pay ee's up to the day.  My question is:

1. some pay periods we have 72 hours worked and others we have 88 hours worked but we are only paying the ee's for 70 hour pay periods I know FLSA states that you pay for all hours worked but we did an average and sometimes they will earn more or less and that's where we got the average to just pay 70 hours can anyone tell me if this is leagal? CA&GA

2. We had some ee's work overtime based on the short work weeks do I pay overtime anything over 40 or anything over 32 and these ee's are based in california.

Uno
FLSA regs have some provisions for clock rounding so long as, on average, it does not generally short the employee.  I've never seen that done in increments greater than 15 minutes.  Simply declaring an average work week seems very hazardous.  Even if it's OK, you are still responsible for actually recording their hours worked.  Assuming you do that, do you audit routinely to ensure that your average does not routinely short the employees?

I don't see how two numbers greater than 70 (72 and 88) can average to 70, so I think there are some problems here.  Federal OT has to be paid for each hour over 40 worked in a calendar work week.  They don't go buy pay periods, they go by weeks.  There's some wiggle room, as long as the Company doesn't manipulate it to avoid paying OT, as to the start and stop of a week (e.g., if your week is Monday through Sunday versus Sunday through Saturday, either could suffice as your base week for OT calculations but not if you mess around with start and stop periods often, which could give rise the appearance of avoiding OT).  In general, the Fed doesn't care what your pay period is, only what hours are worked in a week.

 

Dos
OT is based on statutory limits and nothing else.  Federal is 40 hours in a week.  If they worked 39.9999, then they are not entitled to OT under FLSA.  California has additional OT laws that I am not up on.  Someone from California will chime in and let you know what your OT obligations are under state law.

OT is based

Link below can be found at http://www.stateovertimelaw.us/California.html  California State Minimum Wage and Overtime Law Resource Page

The minimum wage for the state of California is set at $6.75 per hour based on an 8 hour day, 40 hour workweek. If more than 8 hours are worked in a day, overtime of no less than one and a half times the pay is due. This is not applicable if an alternative workweek (no more than four days at 10 hours) was agreed upon prior to June 1, 1999. If more than 12 hours is worked in a day, double time is due. The first 8 hours worked on the 7th day of a 40 hour workweek, time and a half is due; every hour after that, double time is due. This is not to be applied if the employee's total weekly hours do not exceed 30 and whose total hours in any one work day do not exceed 6, in specific wage and hour orders. For more information on California's exceptions to the general overtime law please see www.dir.ca.gov or contact: State Labor Commissioner Division of Labor Standards Enforcement Department of Industrial Relations 455 Golden Gate Ave., 9th Floor San Francisco, CA 94102 Phone: 415-703-4810 Fax: 415-703-4807

Actually, minimum wage in California is $8.00/hour. As for the original post, I believe that the 70-hour average per pay period is based on the average semi-monthly payroll period working 32 hours/week. A pay period can still have 96 or 72 hours, but if the employees are only working 32 hours, then an avergae of 70 would be about right (52 weeks x 32 hours / 24 pay periods = 69.33 hours). However, if they are being paid hourly, it is not correct to pay them a flat 70 hours per pay period. It opens you up to legal problems if say, they actually worked 76 hours and it's their first payroll with the company. It won't matter that you plan to overpay them next period. In this case, your best bet would be to put them on a salary using their base rate of pay and multiplying that by 70 hours/pay period. I don't purport to be an expert on CA labor law, but I believe that as long as their average pay per hour is not less than minimum wage, you are OK paying salary based on 70 hours/pay period if that is what they are actually working.  

In my opinion, pretend salary pay of non-exempt employees generally creates more problems than it fixes.  I say pretend because the way non-exempt "salary" pay works often doesn't really follow the FLSA description of salary, particularly relating to partial days missed, sick time, site closures, etc.  This looks like a shortcut to make the up-to-the-day payroll work.  There are good reasons for paying in arrears and according to the hours actually worked and many of them have to do with making it possible to pay what people should be paid and not take these short cuts that can lead to over or under paying with equally variable degrees of legal risk and financial inefficiency.  I'm a big fan of paying non-exempt people according to their hours worked.