How to pay employees for fluctuating workweeks — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

How to pay employees for fluctuating workweeks

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Q. Our workers have irregular schedules. They may work for two weeks and then be off for three. They typically earn $60,000 to $70,000. Can we pay them every two weeks based on their average yearly income and, if they work more, pay them at an hourly rate? —D.D., Louisiana

A. Maybe. If your workers are exempt employees, you can pay them in this manner as long as you don't reduce their salary based on the number of hours they work. Exempt employees can be paid overtime. You can set the rate for them hourly, and it doesn't need to be time-and-a-half.

If, however, your employees are nonexempt employees, you have a few options. You can pay employees their “salary” and then compensate them for overtime on an hourly basis. If you qualify—and the Labor Department test is stringent—you can pay overtime on a “half-time basis,” which is one-half the basic rate. There's also another option called a “Bello” plan. Because the requirements are complicated, check with your lawyer.

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