Legalities with OverTime & Labor

Discussion in 'Lawn Mowing' started by DFW Area Landscaper, Jan 18, 2004.

  1. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    I was just wondering if this would be legal:

    Pay the employee the minimum wage but offer a bonus program of several hundred per week for showing up on time and being available to work the full week.

    Would that be legal?

    The minimum wage is $5.15 per hour. In 40 hours it would be $206.00. Say you bonus another $225 on top of that for total pay of $431 for 40 hours of work. That comes out to $10.77 per hour.

    But if the employee works 50 hours during the week, he'd get 40 hours at $5.15, 10 hours at $7.73 and the bonus of $225.00. He'd make $508.25 for an hourly rate of $10.17 per hour.

    Would this be legal? When I worked for Chemlawn 14 years ago they paid in a similar manner. As I worked more hours during the week, the pay per hour went down and they saved a bundle on overtime. It was referred to as Chinese overtime by everyone who worked there.

    One other question: If it's drizzling in the morning and it's too soggy to mow but it's July and things will be dry enough to cut with as little as a 1/2 hour of sunshine, what do you do with employees? If they hang out around the shop drinking coffee, are they on the clock? Or do you send them home and tell them to call you in an hour to see if they need to work? How do you handle this and stay legal?

    PS: Please don't relocate this to the elements of business forum. More people will view and resond here. Thanks.

    DFW Area Landscaper
  2. Soupy

    Soupy LawnSite Gold Member
    Messages: 3,125

    I don't know if you know this, but G.W. Bush is trying to do away with overtime pay. Maybe in a year you won't have to worry about it.

    I would call a labor lawyer and see what he says.

    I believe Chemlawn pays a salary now with commision. They changed the bonus to a customer retaining bonus. If you don't lose more then a certain percentage of customer on your route you get the bonus. The bonus is paid monthly. They still call it chinese overtime when they make saturday mandatory work. By the way, My brother-n-law (which is living with us at the moment) works there. He's got a fat route and makes decent money.
  3. Critical Care

    Critical Care LawnSite Bronze Member
    Messages: 1,654

    Regarding your second question... I wouldn't suggest this, but I worked for a company that used "red cards" which were additional time cards for employees to record overtime hours. These overtime hours were accumulated and then used as regular working hours during those rainy days when the employees couldn't work.

    This company also had a bonus program that was based upon a performance list that was reviewed monthly by the supervisor. It contained such criteria as learning points, getting to work and out of the yard on time, achieving a high daily pay to non-pay hourly ratio, education, and more. It was a good idea, but the employees hated it. Nobody knew what they were making, it was too subjective, and in the quest for better effeciency it caused problems with safety and cheated clients out of better service. Bottom line was that the bonus program was scrapped and life became more enjoyable, and honest.
  4. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Messages: 7,670

    Basically any pay plan is legal as long as you pay equivelent to time and half for overtime hours. The FLSA classifies overtime as hours worked beyond 40 hours during a seven day period. The person's hourly rate for this computation is his normal rate of pay. There are a number of court cases dealing with "bonus". Generally a bonus is some form of pay that accrues for going beyond some standard. Hence, I believe a case would fail, and the bonus would be deemed part of the employees regular hourly pay, if the employee merely got the bonus for working a 40 hour week. In my opinion, it's sound like too much of a prima facia case of rigging the pay plan to illegally circumvent overtime premium.
  5. DFW Area Landscaper

    DFW Area Landscaper LawnSite Silver Member
    from DFW, TX
    Messages: 2,116

    Well, the way Chemlawn handled this may well be the best way to handle it. When I worked for them, they paid me $310.00 per week as a salary. That $310.00 covered all hours worked during the week.

    If I worked 40 hours or less (and I never worked less than 40 hours), they paid me $310, which worked out to $7.75 per hour.

    But when I went over 40 hours, that's when the "chinese overtime" kicked in.

    Here's how they paid a 50 hour work week:

    $310 divided by 50 hours equals $6.20 per hour.
    $6.20 for first 40 hours equals $248.00.
    $6.20 times 1.5 for 10 hours equals $93.00.

    Total pay for 50 hours of work: $341.00.

    In all reality, they were paying $31.00 for the ten hours of over time I worked, which is $3.10 per hour.

    I remember I called one of the government agencies, probably the Department of Labor, and they told me it was legal.

    DFW Area Landscaper
  6. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    There's no way around overtime pay. Legally, you MUST pay time and a half for anything over 40 hours. There are some exceptions but unless you own a farm and they're working on the farm all day, and it's seasonal these exceptions don't apply to you.

    So you have to pay him at least 1.5 times his regular pay for overtime. If you want to throw in a bonus beyond that, fine.

    If it were me, I'd just make the bonus variable. Some weeks, when he just got 40 hours, the bonus would be $225. Then, on weeks where he got 50 hours, the bonus would be a little smaller. But I'd just tell him that with wages and bonus, he should expect to make at least $431 per week. Sometimes more. And like you said, I'd make the bonus contingent upon his good performance.
  7. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Messages: 4,724

    Damm some people are cheap. I wonder if you care about the quality of your workers or is it just a question about live bodies.

    I shouldn’t even tell you this as I don’t believe in it and I always thought it made her an absolute scumbag of an employer. But when Martha Stewart was sued several years ago for over time pay. She was paying a guy 15 an hour straight time and working him on call 60-80 hour weeks he sued for over time. Which he felt as I felt he was entitled too. Christ she’s a billionaire and doing this. Well she won the judge ruled that the guy was a legal not illegal but a legal alien a NON CITIZEN. And there for labor laws such as over time did not apply to him so not only did he lose his case he also lost his job and she had him deported as well I hope she loves those stripes she will be wearing soon. But there you have it if they aren’t citizens then you do not need to pay over time if they are pay the over time and be thankful they don’t read how your really feel about them.
  8. Richard Martin

    Richard Martin LawnSite Fanatic
    Messages: 14,699

    And some people wonder why they can't find good American help.
  9. lawnman_scott

    lawnman_scott LawnSite Fanatic
    Messages: 7,547

    You wont have to ask if someone wants to work Saturday. You will have to tell them. Not looking for the happy employee are we?
  10. lbmd1

    lbmd1 LawnSite Senior Member
    Messages: 462

    Overtime pay is not mandatory in New Hampshire for seasonal landscape companies who meet a few criteria like amount of sales as well as % of sales in a certain amount of months. For those of you who think it's unfair, paying our starting mowers at $14 an hour to drive air conditioned late model trucks and sit on $10,000 mowers seems unfair to me but I pay it. The last thing I will do is pay time and a half that would calculate to about $21 an hour for this work is unimaginable. I make $13 an hour driving an oil truck off season to keep busy and the responsibility is far greater. So once again, check your local laws regarding overtime.


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