DoL Clarifies Overtime Requirements

November 8, 2005 ( - The Department of Labor has issued opinion letters regarding overtime pay to employees who are paid a premium pay when called in to work on short notice and to employees who are regularly non-exempt who teach part-time.

SHRM reports that, i n the first letter , an employer had a contract requiring it to pay workers double time when they were called in to work outside regularly scheduled hours with less than four hours of notice. The employer asked the DOL whether it could credit double-time wages against its overtime liability.

The DoL said “Extra compensation may not be credited towards the employer’s overtime obligation under the FLSA (Fair Labor Standards Act),” according to SHRM. The DoL went on to say, however, that the premium pay is excluded from the regular rate of compensation, and the employer would calculate the overtime based on the regular rate.

In thesecond letter, the DoL considered the question of whether an employer could treat a welder, whose position is non-exempt, as exempt from overtime during the time he spent teaching part-time. The employer also asked if the welder had to be paid for his time preparing to teach.

The DoL said the welder must be treated as non-exempt since his primary duties were non-exempt. It also said the employer must pay for the time the welder spent preparing for teaching and tutoring, including overtime. “If the employer knows or has reason to believe that the work is being performed, the employer must count the time as hours worked,” the DOL stated. “This rule applies to work performed away from the premises or the job site, or performed at home.”

The DoL did state in the letter, however, thatthe FLSA permits an employer to pay an employee at different rates for various types of work. The overtime rate would be computed “at not less than one and one-half times the bona fide rates applicable to the same work when performed during non-overtime hours.”