From the Hotline: Compensating Part-Time Employees for Additional Hours
Question: When part-time, nonexempt employees are paid a salary that compensates four hours per day or 20 hours per week, how do we compensate if they work an additional four hours in a week?
Answer: A nonexempt employee may be paid a salary to work 20 hours per week without violating the provisions of the federal Fair Labor Standards Act (FLSA) if the amount of the salary paid when divided by the actual number of hours worked equals the equivalent of at least the federal minimum wage ($7.25 per hour). If the employee is operating in a state with a state minimum wage that is greater than the federal, the same equation applies but the hourly rate must equal at least the state minimum wage rate. Whether an employee is paid on an hourly or salary basis is a decision left to the employer, provided that the applicable minimum wage and overtime requirements are met. A best practice is to pay these individuals on an hourly basis to make sure they are compensated fully or make sure the weekly salary is sufficient that if an employee works additional hours, the hourly rate of pay does not dip below the minimum wage.