Ask the Experts: Vacation Pay and Overtime
Question: While the plant was shut down for a week, we paid our employees their accrued vacation in advance of the shutdown for that week. Subsequently some of the maintenance employees were called into work. We would like to compensate them with additional pay for the time spent working during their “vacation”; however, we would like to know if the vacation pay they already received counts towards their total hours worked for the week for the purposes of calculating overtime pay.
Our response: We first checked with your state’s wage and hour rules and found that your state follows the federal Fair Labor Standards Act rule for paying nonexempt/hourly employees time-and-a-half overtime premium pay for hours actually worked over 40 hours in the workweek. This law is based on hours worked, not on hours paid. For any hours actually worked, employers would typically pay straight time up to 40 hours in that workweek. Any additional time worked beyond the 40 hours would typically be paid at the premium overtime rate. For more information on the law, click on http://www.dol.gov/compliance/topics/wages-overtime-pay.htm