over 8 hours in a day), they must
be compensated overtime pay for
those hours worked in excess. This
could mean paying them an hourly
wage and then time and a half for
any overtime hours. Operators can
still pay them commission only, but
then need to calculate overtime pay
accordingly based upon their weekly
commission and hours. Operators can
pay them a salary still, but then need
to determine their overtime pay from
there. Operators are also allowed to
pay a hybrid of all these types of com-
pensation systems — so long as they
continue to pay them the required
overtime pay as well.
Generally, an employee's regular
rate of pay is determined by "divid-
ing his total [compensation, includ-
ing non-discretionary bonuses, but
minus any exclusions] in any work-
week by the total number of hours
actually worked by him in that work-
week for which such compensation
was paid." Which is documented in
29 C.F.R.§778.109. This calculation
gives operators the employee's regular
hourly rate. The operator can use this
rate to determine the overtime rate,
which the employee is then compen-
sated an additional one-half of this
rate for all overtime hours worked
since the regular rate calculation
already includes the employee getting
compensated for straight time for all
hours worked. 29 C.F.R.§778-118.
Additionally, operators must keep
track of each driver's hours worked
each day, if it be a time clock or turned
in time sheets, so that there is a record
of their hours worked with no dis-
putes of he-said-she-said. When an
employee goes to sue for overtime
compensation, his/her memory of
working overtime is usually embel-
lished — having a solid record of
hours worked keeps them honest and
an operator "out of jail." If route driv-
ers are non-exempt, it is best to meet
with an employment labor counsel to
confrm your way of paying the route
drivers is acceptable. If not, the dam-
ages and penalties that lie ahead could
be devastating to your company.
February 2014 VendingMarketWatch.com Automatic Merchandiser 31
MAIL AD COPY TO: Automatic Merchandiser,
Attn: Ted Banach, P.O. Box 803, Fort Atkinson, WI 53538-0803
Inquiries to Ted Banach: Toll Free: 800-547-7377 x1314 • E-mail: Ted.Banach@cygnus.com
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About the Author
Heather A. Bailey,
Esq., one of Illinois'
2014 Super Lawyers,
is a partner with
SmithAmundsen
LLC and a National
Automatic Merchan-
dising Association Knowledge Source
Partner for over a decade. She focuses
her practice on labor and employment
law issues for employers. She may be
contacted directly at 312-894-3266 or
hbailey@salawus.com.
2014 Employment Law Alert
See more from Heather A. Bailey
about what's new in employment
laws for 2014.
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