We realize this is Payroll 101, but you’d be surprised by how many companies run afoul of this basic rule: Just because an employee receives a salary doesn’t mean he or she isn’t entitled to overtime payments.
That’s a lesson learned the hard way by a Tampa business. Workers for La Bella Vida Assisted Living Facility were paid a set salary for their scheduled shifts.
The problem: These workers often worked more than their scheduled hours – in some cases, 100 hours or more in a week. That caused their hourly rate to dip well below minimum wage, at times to the equivalent of $3 to $5 an hour.
A Fair Labor Standards Act (FLSA) investigation resulted in La Bella Vida being required to pay $287,087 in back wages and damages to 20 employees, the Dept. of Labor (DOL) recently said.
Salaried doesn’t mean exempt
Companies can choose to pay nonexempt employees a flat salary – but that doesn’t mean they’re exempt.
You still need to track every hour for these employees. That’s because you need to know when they work more than 40 hours in a workweek so you can pay overtime, and you can’t let their pay rate dip below the federal minimum wage, the FLSA states.