Best of HRBenefits: This should never be in an employee handbook
May 25, 2009 by StaffPosted in: In this week's e-newsletter
Be careful what you write in employee handbooks. Seemingly innocent mistakes or careless wording can create major liabilities.
One statement that should never be in a handbook is “authorized overtime
is paid at 1.5 the hourly rate.”
Legally, that’s the same as saying “Our organization violates FLSA.”
Under FLSA, if a non-exempt employee works overtime – whether authorized or not – you must pay the overtime rate. What is legal is to head off unwanted OT before it happens.
It’s fine to say, “All overtime must be authorized by your supervisor.”
Next, describe the authorization process, and the disciplinary steps (if any) for breaking the rules.
June 25th, 2009 at 11:06 pm
I see that all the time! I definitely agree you have to be cautious on how you describe the OT. Thanks for posting!
June 26th, 2009 at 9:10 am
I believe you are missing the one essential word. – ONLY
The statement that “authorized overtime is paid at 1.5 the hourly rate” is a true statement of fact and not in violation of FLSA. (and we schould be specific about the definition of ‘overtime’ being over 40 hours worked.)
What should not be said is “ONLY “authorized overtime is paid at 1.5 the hourly rate.”
June 26th, 2009 at 9:55 am
ALL overtime ( authorized or not) must be paid at the time and a half rate by law.
UNAUTHORIZED overtime would then subject the abuser to disciplinary action as appropriate
June 26th, 2009 at 10:10 am
I think that it is the implication that unauthorized OT will not be paid due to the specification of “authorized overtime” that is the problem. The omission of the word unauthorized implys that it will not be paid. One of my favorite quotes really applies here; “The most important thing in communication is to hear what isn’t being said.” – Peter Drucker
I do agree that overtime does need to be fully defined. This helps to dispel the over 8 hours in a day myth.
June 26th, 2009 at 10:10 am
Another point is that OT is based on regular rate, not necessarily hourly rate.
June 26th, 2009 at 10:19 am
As far as defining when OT is earned, you have to be aware of the STATE laws that mays govern something in addition to the general “40 hour” rule. IE: California is over 8 in one day OR over 40 in one week.
June 26th, 2009 at 4:36 pm
In Nevada it depends on how much you make as to whether or not you are paid OT for anything over 8 hours in a day or if it has to be over 40 hours a week. If you make less than one-and-a-half times minimum wage, then the 8-hour rule applies. If you make more, the 40-hour rule applies. We have employees in 12 states and each one has slightly different laws.
July 10th, 2009 at 10:26 am
I recentyly went to a HR law seminar and in some states your base pay can include a per diem. So the per diem is added to your base pay and then if the employee has ot the rate of ot is based on the base pay plus the per diem. I was shocked. The way around this is not to pay a per diem but pay for reciepts turned in for hotel, meals, gas, tolls and so on. Has any one elese heard of this before?
July 10th, 2009 at 10:29 am
I would never recommend paying a per-diem – rather define a maximum per diem rate – ie: personal meals, max per diem rate = 25.00. You’re not agreeing to pay that whether it’s used or not, just saying it’s the max you will pay for personal meals while traveling. That way if the employee goes into OT while traveling, you can pay for what was used.
July 10th, 2009 at 11:41 am
So are you saying to tell employees that go out of town that the company will pay up 25.00 of the receipt they turn in for example?
July 10th, 2009 at 11:52 am
The $25 is just an example…but I woul dbe more specific on what the per diem rate is used for. IE: $25 might be the personal meal maximum. The maximum for business meal may be $50 per person and then you have more defining beyonf that to exclude4 alcohol, etc… make sense>?
July 10th, 2009 at 12:02 pm
Yes I was using the 25 dollars also as an example and we do exclude alcohol that was a good point. Would you suggest getting a receipt for the per diem?
July 10th, 2009 at 12:06 pm
All reimbursements should be accompanied by a receipt – yes. Submit just as any other expense reimbursements. Glad to help in anyway!