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How do you retroactive pay an hourly employee that is now on salary who has worked alot of overtime?

How do you retroactive pay an hourly employee that is now on salary who has worked alot of overtime?

Full question:

How do you retroactive pay an hourly employee that is now on salary whom has worked alot of overtime as an hourly employee? What is the law on how to do this?

Category: Employment
Subcategory: Hours
Date: 04/07/2025
State: California

Answer:

Please see the information at the following links:

http://www.dol.gov/dol/allcfr/Title_29/Part_778/29CFR778.303.htm

http://www.dol.gov/esa/contacts/whd/contactForm.asp

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

How to calculate back pay for salary employees?

To calculate back pay for salaried employees, first determine the period they were underpaid. Next, identify their correct salary and any overtime they should have received. For any overtime, calculate the hourly rate based on their salary and compute the additional pay for hours worked beyond the standard 40 per week. Ensure that the calculations comply with the Fair Labor Standards Act (FLSA) requirements. Document all calculations for clarity and accuracy.

How to calculate retroactive pay for salaried employees?

To calculate retroactive pay for salaried employees, identify the period of underpayment and the correct salary amount. If applicable, calculate any overtime by determining the hourly equivalent of their salary and multiplying it by the number of overtime hours worked. Ensure that all calculations align with FLSA guidelines for overtime pay. Keep detailed records of how the retroactive pay was calculated.

What is a retroactive pay example?

An example of retroactive pay is when an employee was paid $50,000 annually but was underpaid due to a clerical error. If they should have received $5,000 more over the year, the employer would issue a retroactive payment of $5,000 to correct the mistake. This adjustment ensures the employee receives the total compensation they were entitled to for that period.

Does retroactive pay include overtime?

Yes, retroactive pay can include overtime if the employee is entitled to it. For hourly employees, any hours worked over 40 in a workweek must be compensated at the appropriate overtime rate. When calculating retroactive pay, ensure that overtime hours are accounted for based on the employee's hourly wage prior to any salary conversion.

What is a retroactive salary adjustment?

A retroactive salary adjustment is a payment made to an employee to correct a previous underpayment. This adjustment can occur due to errors in salary calculations, changes in pay rates, or adjustments for overtime worked. The adjustment ensures that the employee receives the correct total compensation for the time worked, reflecting any discrepancies from prior pay periods.