Mutual wage agreements may trump OT requirements — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Mutual wage agreements may trump OT requirements

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Under limited circumstances, employers and nonexempt employees can agree to set a salary that covers regular work and overtime.

Recent case: Before Carlos Arechiga went to work as a janitor, he and his prospective supervisor discussed wages. They agreed that Arechiga would work 40 hours per week at the regular rate of $11.14 per hour and an additional 26 hours per week at $16.71 per hour for a total weekly salary of $880.

Later, Arechiga sued, alleging such agreements were illegal.

The Court of Appeal of California ruled that the agreement was valid because it had been agreed to before work started, included a specific rate for regular hours and for overtime hours, specified the total number of hours to be worked each week and clearly stated that a set amount would be paid for the week. (Arechiga v. Dolores Press, No. 218171, Court of Appeal of California, 2nd Appellate District, 2011)

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