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Fluctuating Workweek, Belo, and Other Guaranteed Pay Plans for Nonexempt Employees
- When a guaranteed pay plan makes sense for the employer
- Record keeping requirements for fixed salary plans.
- How a fluctuating workweek plan could be beneficial
- Which deductions from salary are allowed, which are prohibited
- Plans that fail to meet FLSA standards and why they fail
- How to handle FLMA leave under guaranteed pay plans
- Applying paid time off to the fixed salary
- Bonuses and fluctuating-workweek plans – the regulation that almost was
- Overtime pay computations – the “half-time” method
- Control of overtime costs - non-standard schedules and seasonal employment
- How to assure fixed salary employees are properly compensated for overtime
Overview of the webinar
The Fair Labor Standards Act governs the minimum wage and overtime pay requirements of the nation’s workers. Under the FLSA, employers are required to pay employees, who are not otherwise exempt, the federal minimum wage and any overtime pay of one and one-half times the employee’s regular rate of pay.
The regular rate of pay is calculated by adding together all wage payments; noncash wages in the form of goods, board, or lodging; and nonovertime premium payments, such as night shift differentials. Because of these requirements, nonexempt employee pay is often variable.
The amount paid to a nonexempt employee, even if salaried, is usually subject to adjustment with variations in hours worked.
However, where the requirements are met, a nonexempt employee can be paid a fixed salary each workweek even though the hours vary from week to week. Such plans include fluctuating-workweek plans, Belo plans, and certain other guaranteed pay plans. However, such plans are subject to strict requirements in order to be compliant.
In establishing a guaranteed pay plan, it is important for the employer to make sure that the employees understand how they are being compensated and, where required, agree to the payment plan. Employers must also avoid practices that are considered by the DOL to circumvent the minimum wage and overtime requirements of the FLSA.
Who should attend?
- Payroll Supervisors and Personnel
- Accounts Payable Supervisors and Personnel
- Public Accountants
- Internal Auditors
- Tax Compliance Officers
- Enrolled Agents
- Employee Benefits Administrators
- Officers and Managers with Tax Compliance Oversight
- Company / Business Owners
- Managers/ Supervisors
- Public Agency Managers
- Audit and Compliance Personnel / Risk Managers
Why should you attend?
Changes to the white-collar exemptions from the minimum wage and overtime requirements of the Fair Labor Standards Act have many employers faced with reclassification of some currently exempt employees paid on a fixed salary basis to nonexempt status.
Paying a fixed salary, regardless of hours worked, is generally limited to exempt employees. The amount paid to a non-exempt employee, even if salaried, is usually subject to adjustment with variations in hours worked.
Where the requirements are met, however, a non-exempt employee can be paid a fixed salary each workweek even though the hours vary from week to week.
Understanding the rules for such plans is critical. It is important for employers to be aware that such plans do not reduce the need to keep accurate records of hours worked. Such plans have strict requirements for compliance.
In addition, the Department of Labor has identified a number of plans that employers have attempted to use that do not meet the statutory requirements of the FLSA. Such plans include such things as artificial wage rates, split day plans, pseudo bonuses, or a low “regular” rate supplemented by employer provided “facilities”. Use of such plans can be costly to employers in terms of payment of back wages and penalties.
Faculty - Mr.Patrick A. Haggerty
Patrick A. Haggerty is a tax practitioner, author, and educator. His work experience includes nonprofit organization management, banking,manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent tax payers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including payroll tax issues, FLSA compliance, and information return reporting.