Q & A : How Should Overtime Be Paid to Exempt Employees?

Q. My employer pays several exempt employees overtime on a regular basis at the rate of straight time only. I heard at a seminar that you can’t pay exempt employees overtime calculated on their hourly rate, but you can pay a bonus--$200 for 10 hours, for example. Can you advise which method is acceptable?

--A.D., Anaheim

A. To qualify as exempt from overtime under federal and state wage and hour law, executive, professional and administrative employees must meet certain duty tests and be paid a salary of at least $250 a week.

If qualified for such an exemption, an exempt employee need not be paid overtime premium pay. Ordinarily, an exempt employee is paid a salary to do the job, regardless of how many hours it takes.

As far as the federal Wage and Hour Division is concerned, extra compensation may be paid to exempt employees on a straight-time, time-and-a-half or even lump-sum basis without affecting the employee’s exempt status. However, there have been a few court cases (in which the federal Wage and Hour Division was not involved) holding that payment to exempt employees on an hourly basis for extra hours is inconsistent with payment “on a salary basis.”

One way to avoid this potential problem is to pay a lump sum to exempt employees for extra hours, unrelated to their actual hours of work or any hourly rate. Simply paying $200 for 10 hours at $20 an hour and calling it a bonus would probably not avoid the potential problem.

Extra payments on any basis would not be a problem under California law because the state requires only that an exempt employee receive remuneration of at least a specific amount, as opposed to being paid on a salary basis.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor law instructor, UC Irvine

Beard Discrimination Is Legal

Q. I recently applied for a position with a privately owned mortuary to sell “pre-need” funeral arrangements. After a general orientation, I was handed a copy of the company’s dress code.

After leaving this 1 1/2-hour meeting, I read that as part of the dress code “no beards are permitted.” I have a very closely cut, neat beard that is much shorter than many mustaches, yet I was automatically excluded from future considerations. The manager I spoke to told me a company policy that prohibited women from wearing pants was changed after women employees protested. However, the no-beard policy remains.

I find this to be gross discrimination. They were not interested in any of my qualifications or abilities to perform the job, but solely if I had facial hair.

Is such a bias lawful? Do I have any recourse?

--D.R., Beverly Hills

*

A. Having had a beard for more than 20 years myself, I have sympathy with your plight. And although it certainly is a form of discrimination not to employ persons with beards, the answer to your question is that such a bias generally remains lawful, with two exceptions.

First, although it is permissible for employers to maintain grooming standards and, obviously, to have differing standards for men and women, there must be some effort to have reasonable standards that apply to members of both sexes who occupy the same or similar positions. It could be sex discrimination to have a strict standard for members of one sex but a lax one for the other for the same or similar positions.

In your case, you said that the females had gotten a “no pants” rule rescinded. However, that does not necessarily mean that it is discriminatory to allow women to wear pants while you must be cleanshaven. In fact, California law was recently changed to make it unlawful for employers to forbid female employees to wear pants solely because they are women.

Second, the courts have prohibited employers from requiring certain African American men to be cleanshaven if they have a facial condition that makes shaving quite painful.

Assuming that neither of the two above exceptions applies to you, your only recourse is to remove the beard if you want to work for this employer.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky & Walker

Employee Must Be Paid for All Hours

Q. Our company requires that “all hours in excess of the normal scheduled workday must be initialed by the employee’s immediate supervisor at the time of occurrence.” This, understandably, prevents employees from claiming overtime that was never authorized.

Our local management has taken this a step further and recently issued a memo stating that any deviation from an employee’s normal schedule needs to be signed by a supervisor. This would include deviations scheduled and authorized ahead of time by management, such as shift trades, vacations, personal holidays, as well as sick time.

Local management has stated that employees will not be paid for deviations unless they are initialed by a supervisor on the time card. Is this legal?

--U.A., Santa Ana

*

A. No. An employee is entitled to be paid for all hours worked, even when the employee works an unauthorized shift. However, if an employee works an unauthorized schedule without management approval, the employer may discipline the employee for not working the proper schedule.

--William H. Hackel III

Employment law attorney

Spray, Gould & Bowers