What are some commonly used, but illegal, payment methods?
Fixed sum for varying amounts of overtime: Some employers pay a fixed sum that they attempt to use as overtime compensation. A lump sum payment for work performed during overtime hours without regard to the number of hours worked does not qualify as overtime compensation. This is true even if the lump sum exceeds the amount to which the employee would be paid on a per hour basis. To properly compute the employee’s overtime pay, the lump sum payment must be added to the employee’s other overtime compensation and then the employee’s regular rate of pay determined. The employee is entitled to overtime pay equal to 1.5 times this regular rate of pay. Salary includes regularly scheduled overtime hours: Another similar method occurs where an employer asserts that a portion of an employee’s salary constitutes overtime pay. This is not allowed except under very specific circumstances called Belo contracts. Overtime pay must be in addition to and cannot be a part of an employee’s salary. Bonus
