Retroactive pay decrease & OT back pay

My husband's co. recently had the IDOL come in, and now they have to pay out OT. He is getting back pay, but only at half pay, and they told him today that they are lowering his hourly rate by $3.50, effective last Monday. Is this legal to make it retroactive? Don't they have to give him some kind of notice?

He works 50-55 hrs per week. Last month, he was sick one day, and they deducted a day from his paycheck, even though he worked 45 hrs in 4 days. So, why is he getting only half time pay and not time and a half? I think they were treating him like an hourly employee even though he was salary.

Also, should he be paid for being on call? He is on call one week a month, and takes home a Nextel phone, pager, and paperwork to take calls. They pay him an extra $60.

So, my questions are: Is it legal to make a pay decrease retroactive?

Is he owed back pay at time and a half instead of half pay, and can he collect anything for them paying OT so late? (He's been there 4 months).

And, should he be paid for being on call and being required to work from home?

Thank you for your time.

Sheri Davis

1 answer  |  asked Apr 16, 2001 6:18 PM [EST]  |  applies to Illinois

Answers (1)

David L. Lee
A salaried employee may only get half-time for overtime; overtime for on-call time.

The answers to your questions depend on many facts that were not in your post.

Under federal and Illinois law, most employees are presumed to get time-and-a-half for all hours worked in excess of 40 hours per week. To avoid paying an employee overtime, the employer has to prove that the employee fits into an "exemption". An employer is not legally required to pay the so-called "exempt employees" overtime (although the employer can do so voluntarily).

Just being on a salary is not enough to make an employee "exempt". For a lawyer to know if a salaried employee is "exempt", the lawyer has to find out about the employee's job duties and the approximate percent of the employee's time spent on the various job duties. The lawyer may also have to know other information.

If a salaried employee is not "exempt", then the employee may only be entitled to half-time for overtime if the employer and the employee had an agreement or a "clear understanding" that the salary was intended to cover all hours worked. The theory is that the salary paid the "time" part of time-and-a-half, so the employee is entitled only to the "half" part. To determine if there was such an agreement or a "clear understanding", the lawyer would again need to know many facts.

From your post, however, it sounds like your husband was paid hourly. If that is true, then he should be entitled to time-and-a-half for overtime.

In addition to overtime, the law provides for penalties for not paying overtime when due. The penalties under federal law can as much as double the amount of overtime not paid when due; under Illinois law, the penalty can be up to 2% per month. Unless your husband waives these penalties in writing, they can be collected even if the company eventually paid him his overtime.

If your husband is being paid hourly, then he should be paid for working at home, as long as the employer knows or has reason to know that he is doing the work. A salaried employee may not be able to collect extra money for working at home -- again a lawyer would want to know many other facts about that.

As to being on-call, that also depends on many facts that the lawyer would need to find out.

A retroactive pay decrease is probably not legal; a prospective pay decrease is generally legal, but it could be illegal if it was in retaliation for making an overtime complaint. A lawyer would want to know more about this, too.

My advice to your husband is that he not sign anything giving up any of his rights or saying that he's been paid in full. I also strongly recommend that your husband consult with a lawyer who represents employees and is an expert on the Fair Labor Standards Act or on wage and hour law. It would probably be well worth paying a consultation fee to have an expert analysis of your husband's particular situation.

David Lee (Chicago, Illinois)

posted by David L. Lee  |  Apr 17, 2001 1:58 PM [EST]

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