6. What About Highly Compensated Employees?
over 40 for the week, must be paid at the time- and-half rate. 8. What If I Pay Piece Rate? Paying a piece-rate is one of the most common practices for compensating flooring installers. This compensation method is perfectly legal if properly executed and documented. It is often assumed, however, if retailers pay a piece-rate, they do not have to worry about minimum wage or overtime pay. To the contrary, the requirements of the FLSA and state wage and hour laws requiring minimum wage and overtime pay still apply. These laws require the flooring retailer or contractor to keep track of employee hours and to ensure each employee is paid minimum wage and all overtime due. The federal Wage & Hour Division defines piece-rate as the “regular rate of pay for an employee paid on a piece work basis ... obtained by dividing the total weekly earnings by the total number of hours worked in that week.” The total hours must include all time worked, including traveling to a job site from the employer’s premises, picking up job materials and similar time. This calculation must also take into account any overtime worked by the employee. To use the example provided by the Wage and Hour Division who enforces the FLSA, assume an employee worked 45 hours and was paid $675. The regular hourly rate for that week would be $15 ($675 divided by 45 hours); a rate well over minimum wage and minimum overtime rate. This only determines the non-overtime rate. The employee is entitled to time and a half for the five hours of overtime, ($22.50 an hour). Since the $675 already paid included
For highly compensated employees (“HCEs”) the minimum total compensation requirement for the HCE exemption is $132,964 per year, including at least $844 per week that must be paid on a salary or fee basis. The HCEs minimum salary level is scheduled to increase on January 1, 2025 to $151,164 per year, including at least $1,128 per week that must be paid on a salary or fee basis. HCEs are subject to a more relaxed duties test, which requires only that the employee’s primary duty must be office or nonmanual work and the employee must customarily and regularly perform at least one of the bona fide exempt duties of an EAP employee. 7. What About Commissioned Employees? To be exempt, a commissioned employee must meet the following requirements: • The employee must work for a retail or service establishment; • The employee’s regular rate of pay must exceed 1.5 times the federal minimum wage for every hour worked in a workweek in which overtime hours are worked; and • More than half of the employee’s total compensation during a representative period (which cannot exceed one year) must come from commissions. If a commissioned employee does not meet these requirements, then they are due overtime. As explained above, the employees regular rate of pay would have to be calculated by adding his base pay and commission to determine the total weekly amount paid and then divide it by the hours worked. Any hours
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