A title company in Nebraska has agreed to pay $92,782 to 24 workers in back pay after the U.S. Department of Labor checked them out. The Labor folks found violations for overtime and record-keeping. They concluded that a closer is not an exempt employee.
To me, the most interesting item was that time and a half is calculated including bonuses, incentive pay and commissions. That is more fair that I've ever seen. It means if an employee received a $1000 Christmas bonus, they get another 72 cents an hour for each overtime hour worked that year.
The Fair Labor Standards Act's, says overtime is time and one-half their regular rates including commissions, bonuses and incentive pay for all hours worked beyond 40 hours per week. I always thought time and a half was straight time. It puts a different light on bonuses. To meet this requirement bonuses need reduced, and an overtime adjustment added into the check. Cover that detail on the stub and it should pass the muster. It is rather annoying if you want to give away some even amount of money.
The government deemed the firm incorrectly classified closers to be exempt from overtime requirements. They were paid fixed salaries, and should have been hourly. The FLSA first says "Exemptions are narrowly construed against the employer asserting them" and follows with exempt employees are limited to bona fide executives, administrative, professional and outside sales positions, as well as certain computer employees (programmers and the like). There are other specific exemptions like "Homeworkers making wreaths" and 30 more.
Then to throw a bit of salt in the wound, the company got penalized for not tracking the hours of the "exempt" employees. Of course not many would track the hours of an exempt employee, so it's free money to the Department of Labor.
It might be time to review employee classifications, bonus structures, classifications, or other pay incentives before you are on the receiving end of one of these visits.