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How do we pay hourly employees if they work at a job outside their dept. that pays a different scale?

I work for an ambulance company.  Our medical technician, lets say our EMT-B work a 48hr On and 96hr Off.  They are paid $10.50/hr.  We have office or maintenance employees who work in their respective dept at a different wage scale.  Some of these employees are also certificed to work as EMT-B.  We do not, unless absolutely necessary, have that work on an ambulance because we are under the assumption that they have to be paid the higher of the two hourly wage.  For example, a mechanic, who is also an EMT-B earns $17.00/hr as a mechanic.  If the mechanic works as an EMT-B during - but usually  after his normal work day, does the mechanic have to paid $17.00hr, though he is not working as a mechanic or the  $10.50/hr EMT-B wage while working as an EMT-B?   My research on DOL wite says that the higher hourly wage has to be paid.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Differential pay is common in most industries. The clearest example is in a Sales capacity. There are different commissions for different products within one company and most plans are tiered. I think that if you have each employee sign a compensation term sheet you should be fine. For doing task 1 you are paid x, but for task 2 you are paid y. The DOL is concerned with the potential of treating emoloyees unfairly by defaulting to the lower pay.

Paul Weller
Title: Managing Partner
Company: Morpheus Technologies, LLC
(Managing Partner, Morpheus Technologies, LLC) |

Paying different wage scales can really, really complicate your overtime payments - at least in the State of California. CA requires you to compute the average straight time rate that your employee earns, by adding together total base compensation (w/o overtime premium) at both pay rates within a pay-week, and then dividing by the total number of hours worked in the week. So, if your mechanic works 40 hrs @ $17 + another 10 hours as an EMT @ $10.50, his/her base earnings would be $785 ($680 + $105) over 50 hours. This calculates to an average straight time rate of $15.70 per hour.

Overtime gets paid using this average rate for the premium above straight time rate being paid for each category. So, if the EE earns 1.5X time as a mechanic, overtime compensation "drops" from $25.50 per hour ($17 x1.5) to $24.85 ($17 + $15.70/2). On the other hand, if the EE earns 1.5X time as an EMT, overtime compensation "bumps" from $15.25 per hour ($10.50 x 1.5) to $18.35 ($10.50 + $15.70/2).

The BIG headache is that these rates need to be computed differently each pay-week - because the proportion of work at the different rates is bound to change. Also, you need to pay OT by normal rules on the time as progressively worked from the start of the pay-week. So if your guy is moonlighting in the EMT role, or working a weekend after a full 40 hour standard work week, you'll pay the higher OT on the EMT work...

The SIMPLEST solution is to compensate EMT straight time @ $10.50 and EMT overtime @ $19.00 ($10.50 straight time for EMTs + the $17/2 OT rate for mechanics)

Clear as mud... right? God bless the great State of California.

My understanding is that other states require the same kind of tracking - but they generally enforce payroll issues like California does.

Lynne Holloman
Title: Accounting Manager
Company: Woodside Equine Clinic
(Accounting Manager, Woodside Equine Clinic) |

You are very right Mr. Weller. But blended overtime is NOT just in California. And failing to calculate blended overtime can land you in hot water and lots of back pay plus interest upon an audit. On a practical basis, if our employees start to work in another dept, we have them clock out from that dept and re-clock back in under a different dept to record the time pairs at the correct rate of pay. Then their time & overtime is calculated as either straight OT or Blended OT. Also, total pay is a factor in your calculations so say if an employee gets not just hourly wages, but flat adder amounts in their paycheck for coming in at off times or maybe commissions added in for piece work, those amounts are included in total amount earned portion of the equation. Go to:
http://www.dol.gov/whd/regs/compliance/whdfs23.pdf for more information.

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