What do we need to consider before offering extra pay for weekend work?
Q. We have a short-term project coming up that is going to require some of our hourly, nonexempt employees to work some extra weekend hours. We are thinking we might pay them a higher rate to work on the weekends to encourage employees to volunteer and to reward them. Is there anything we should be keeping in mind before we do that?
A. Yes. You’ll want to be sure that you set up your arrangement to comply with federal and state wage-and-hour laws. Under these wage-and-hour laws, nonexempt employees must be paid at least one and a half times their “regular rate of pay” for any hours worked in excess of 40 hours in their seven day workweek.
The employees’ weekend hours must be counted as hours worked in determining if they have worked overtime hours and are owed overtime pay. In addition, you’ll want to make sure you are correctly calculating their regular and overtime rate of pay. As a general rule, any nondiscretionary pay must be factored into the regular rate of pay to determine the time-and-a-half overtime rate.
There is, however, a special rule for “premium pay.” If an employer establishes a true premium rate for work done on Saturdays, Sundays or holidays, this premium rate does not have to be included in the regular rate of pay. In addition, the amount of premium pay for the workweek can be credited toward overtime pay, although any overtime pay due that exceeds this credited amount must still be paid.
Megan L. Anderson is an attorney with Gray Plant Mooty’s Employment Law Practice Group in Minneapolis. Concentrating her practice in employment law counseling and litigation, she regularly advises employers and provides training on a variety of employment law issues. Contact her at firstname.lastname@example.org or (612) 632-3004.