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QUESTION: I have a non-exempt employee who’s paid on a salary basis. She is typically scheduled to work 38 hours a week. If she works more, for example 42 hours, am I required to pay her more? Likewise, if she works less, can I deduct for hours not worked?
ANSWER: As a non-exempt employee, she must be paid only for hours actually worked. The rate of pay must be at least minimum wage or higher. Furthermore, when a non-exempt employee works more than 40 hours for the week, she must be paid time and one-half for overtime.
Weekly salary can be based on any number up to 40 in a week. It appears you have this set up to be a salary based on 38 hours a week. In this case, any work over 38 must be paid, which would include applicable overtime. For example, if the employee works 40 hours, two extra hours of pay is due. If, as in your example, the employee works 42 hours, she is entitled to four hours of extra pay with two hours being paid at the overtime rate.
This also means that the employer can dock salary payments when the full shift is not worked. For example, if the employee works only 30 hours, she could have her salary reduced by eight hours unless there is a paid time off benefit available to offset the loss of hours.
It’s important that you review how the agreement was originally set up and whether there is anything in writing about it. If you have an agreement that the salary will be paid if the employee works less, then that agreement will stand no matter what the law says an employer can do.
QUESTION: I offer a vacation and sick leave benefit. I have an employee who called in sick for two days and, therefore, used 16 hours of sick time. She then went on to work 30 hours for the week. This puts her pay at 46 hours for the week. She believes she is now entitled to overtime. I don’t think she is.
ANSWER: You are correct. Overtime is counted only for hours actually worked, not hours paid. Employers must pay time and one-half for all hours worked over 40 in a week (and/or eight in a day in California). Therefore, any paid time off benefit, whether it’s vacation, sick, PTO, or something else, does not count toward overtime hours for the week.
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