Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

80 | Massachusetts Wage & Hour Peculiarities, 2022 ed. © 2022 Seyfarth Shaw LLP particular week, and additional half-time, based on that rate, is due for each hour in excess of 40.” 433 When an employee works fewer than the specified number of hours in a given week, the fixed salary method allows an employer to compute an employee’s pay for that week in one of three ways: • Method 1: Add salary plus half-time OT premium (salary divided by the specified number of hours , then divided by 2) for each hour worked from hours 40 to the specified number of hours, then subtract the hourly rate (salary divided by specified number of hours) for each hour below (i.e., short of) the specified number of hours. 434 • Method 2: Add salary plus half-time OT premium (salary divided by actual number of hours worked , up to maximum of specified number, then divided by 2) for each hour worked from hours 40 to the specified number of hours. • Method 3: Add salary plus half-time OT premium (salary divided by 40 , then divided by 2) for each hour worked from hours 40 to the specified number of hours. 435 Examples of these calculation methods, assuming a salary of $700 for 50 hours, and 45 hours worked in the week, are: • Method 1: $700 [salary] + ($7*5) [($700/50)/2 * OT Hours] - ($14*5) [$700/50 * (50-45)] = $665.00 • Method 2: $700 [salary] + ($7.78*5) [($700/45)/2 * OT Hours] = $738.90 • Method 3: $700 [salary] + ($8.75*5) [($700/40)/2 * OT Hours] = $743.75 When an employee works more than the specified number of hours in a given week, the employee must be paid one and one-half times regular rate for every hour worked over the specified number of hours. The determination of which method is most appropriate depends on business decisions and the ability to monitor compliance. Method 1 is a salary in name only. When the hours worked are fewer than the specified number of hours, the “salary” is reduced by the regular rate per hour. If 433 Id. 434 See 29 C.F.R. 778.325 (“This assumes that when an employee works less than 50 hours in a part icular week, deduct ions are made at a rate of $5.50 per hour for the hours not worked.”). 435 The DOL has not explicit ly approved this method. It s FieldOperat ions Handbook, however, permit s the use of a forty-hour half-t ime for FWW employees. See WHD Field Operat ions Handbook 32b04b(a). Although the DOL has not made a similar pronouncement with respect to employees paid a salary for a fixed number of hours, the underlying logic would appear to permit such a calculat ion.