By Julie Theall
December 2007
- Using comp time to "pay" for overtime.
Private employers must pay for overtime in cash, not time. Paying with time-off only works if the time-off is granted in the same work week.
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The wage and hour rules are not always intuitive. To the contrary, good faith mistakes are not uncommon. Use this checklist as a reminder of what not to do. |
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- Thinking that all salaried employees must be exempt.
The salary requirement is only one requirement for exemption.
- Using the Administrative Exemption beyond its intended scope.
Not all "administrative" employees are exempt - in fact, most of them are not exempt.
- Deducting from salaried exempt employees' wages for absences of less than one full day.
When you treat a salaried employee as though he were an hourly employee by deducting from wages for hours not worked, you lose the exemption from overtime.
- Including vacation, sick leave and holiday time in the 40-hour calculation for overtime.
Hours counted for overtime purposes are actual hours worked. An employer need not pay overtime when vacation time makes up part of the 40 hours in a week, for example.
- Not including all compensation in the regular rate when calculating overtime.
Employers who pay nondiscretionary bonuses (e.g., based on production, attendance, etc.) must include them in the regular rate of pay for purposes of calculating the overtime rate.
- Attempting to make retroactive wage changes.
Always announce a change in wages or benefits in writing and apply it prospectively.
- Failing to specify forfeiture of vacation pay on termination of employment.
North Carolina law requires you to spell out in writing how vacation time or pay is lost or forfeited.
- Deducting from wages without a written authorization.
Unless authorized by statute or by a writing from the employee, do not deduct from wages.
- Not enforcing the rules on work before/after hours.
If an employer "suffers or permits" works to occur, the employer is responsible for compensating the employee for the work. Turning a blind eye to work done "off the clock" at home or outside ordinary business hours does not eliminate the duty to pay.
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