Have you ever heard about employees qualifying for Overtime when they work over 8 hours in a single day? Well, it is real, and it is occurring in the health care secure under an exemption outlined in the Federal U.S. Department of Labor Wage and Hour Division.
You might ask, why would we offer this to our employees? Can we offer this to our employees? Should we offer to our employees?
The Fair Labor Standards Act (FLSA) calls for eligible employers to pay non-exempt employees at least the federal minimum wage of $7.25 per hour, for all hours worked and overtime pay for hours worked over 40 in a workweek. Under section 7(j) of the FLSA, hospitals and residential care facilities can define work as fourteen days. This is instead of the 40-hour workweek determining overtime.
To qualify for this, the employer must have an agreement in place with the employees affected. (personnel policy or letter of understanding). When this is in place, the employer must pay overtime when the employee works over 8 hours in a day and when they work over 80 hours in 14 consecutive days. When this occurs, the employer will pay one-half the regular rate.
How can we screw this up?
1) Your organization does not qualify for the exemption.
a. The organization must be either a hospital or residential care facility. The resident must reside on-site to qualify for the program of 8 and 80 hours.
2) 2)You do not pay the employee Over Time wages when they work our 8 hours in a day.
a. You must pay time-half for all hours worked over 8 hours and 80 hours.
3) 3) Not counting non-discretionary bonuses as part of the base wage when calculating overtime.
a. overtime pay, section 7(e) of the FLSA provides that non-discretionary bonuses must be included in the regular rate of pay.
i. Non-discretionary bonuses include those that are stated to employees to promote them to run more steadily, and bonuses created to promote employees to stay with a company.
What are some other common mistakes?
According to a nationally recognized law firm Baker Donelson, some additional mistakes are:
- failing to correctly calculate the employee’s regular rate by omitting shift differential pay and performance-based bonuses.
- failing to add hours worked in more than one department or at more than one facility when determining the total hours worked.
- failing to include time spent performing on-call assignments.
In conclusion, Does It Make Sense to implement this change and convert it to 8 and 80?
One, you must qualify for this rule under the FLSA guidelines. Next, you need to look at your scheduling practices to determine if this makes financial sense. For instance, if you schedule 12-hour shifts over a 14-calendar day period, you would be paying 4 hours of OT per day that the employee worked over 8 hours. If you schedule 8-hour shifts and the employee works 80 hours, you will pay zero dollars in Overtime.
Before you decide to convert to an 8 and 80-hour, it is best to consult with your Accountants and legal counsel. You should ask the following questions. (1) Is my Company under the rules and laws permitted to pay OT in this manner; (2) will you provide me an agreement that I can have the employee sign or write a policy that we can implement this program.
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