A recent case raises the topic of past overtime transgressions by companies. In the past, some companies have had the practice of hiring employees as management staff to avoid paying overtime. Howard Johnson’s, the hospitality giant, applied this practice in the early 1980’s. The company was found responsible for hiring people with the positions of “assistant managers” when they worked as dishwashers, waiters and waitresses. The managers were considered “salaried” and exempt from overtime pay. Many of them worked 80 hours or more per week, with no pay for the extra hours. Howard Johnson’s lost a class-action suit and eventually had to pay back wages to all the employees.
These practices are violations of federal and North Dakota minimum wage laws. They didn’t work in the 80’s and they don’t work today. That conclusion is reinforced by a recent case involving retail giant Wal-Mart Inc. The company recently agreed to compensate 87,000 employees throughout the country, including North Dakota. The amount of the total compensation is $33 million and it will be earmarked to pay back wages and interest.
It is widely accepted that “salaried” employees are managers who often work 10 or 12 hours a day, at the office, at home or on the weekends. That’s because they receive a good salary and other compensation, like commissions or bonuses. Many salaried managers are considered exempt from overtime payment.
However, many employers and employees alike are unaware that not all salaried employees are exempt from overtime. The guidelines of the US Department of Labor say that an overtime-exempt employee must have significant decision-making power. Usually this includes the authority to fire or hire 3 or more people on his or her staff. In addition, overtime exempt employees must earn at least $23,660 or more per year.
In the suit with Wal- Mart, the US Department of Labor ruled that some employees, whose positions were manager trainees, programmer trainees, and salaried interns, were entitled to overtime pay. In these cases, the employees were “non-exempt salaried” and have the right to be paid time-and-one-half after 40 hours. Under one test, a manager trainee must earn more than $23,660 per year to be considered “salaried-exempt.”
In North Dakota, the overtime law is worth taking a look at. First and foremost, it sticks with many of the same basic rules that a lot of states we’ve looked at have, as well as what the federal government has. The big rule, of course, is that for most employees, the average work week consists of 40 days.
Anytime an employee works more than 40 hours in a week, then, the employer is lawfully mandated to pay that employee time and a half for all time over those base 40 hours.
However, North Dakota takes a turn of its own when it comes to the lawful work weeks of some of specific types of workers. For instance, when it comes to taxicab drivers, their work week is 50 hours. People who work in hospital and residential institutions can be based on a 14-day overtime pay period.
When it comes to employees who don’t get overtime at all, or whose employers aren’t at least legally mandated to pay overtime, North Dakota has many of the same exclusions that we’ve seen in other states and on the federal level, as prescribed by the Fair Labor Standards Act. But North Dakota also has some of its own exclusions.
Some of the exclusions include the standard exclusion for most salaried workers, especially those who are “bona fide” administrators, executives, or professionals. Also excluded from overtime pay are agricultural workers, people who give direct care, such as foster care or in shelters, mechanic paid on commission, live-in domestics, computer employees who make more than $27.63 per hour, and outside salesmen.
If on the other hand, you are entitled to overtime, there are some twists to the North Dakota law that we should look at. For instance, here’s a pretty standard rule: overtime is calculated by actual time worked, so paid personal days, sick time and holiday hours do not count toward your 40 hours.