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Non-Productive Work, Reduced Wages and Overtime

HR Insights

Posted on 8/22/2018 by Michael Zamora
Non-Productive Work & Reduced Wages

You are able to pay an employee at a reduced rate for non-productive work, including trainings, meetings, travel time, and on-call time. The only stipulation is that you cannot go below the federal (and state/ municipal, if applicable) minimum wage rate. Additionally, to implement a reduced, non-productive wage, you must ensure you have a detailed policy outlining: the wage(s), qualifying eligibility of meetings and trainings, and how overtime is computed—this should be outlined in the employee handbook or a standalone policy, at the very least. Lastly, like any hours worked, reduced rates should always be clearly recorded as such.

Non-Productive Wages & Overtime

If the employee incurs overtime while under the lower rate of pay, the overtime must be paid out at the employee’s normal overtime rate, or at a weighted average/blended rate—the overtime rate cannot be calculated using only the reduced “meeting and training” rate of pay. While weighted/blended rate overtime calculations can sometimes be quite intricate, the general rule is that an employee must be paid at a rate of not less than 1.5 times the weighted average of all non-overtime hours that contributed to that workweek. Because all hours contribute to overtime, the blended rate ensures that all hours are taken into consideration, and ensures employers are not strategically only scheduling trainings and meetings at the end of the day or workweek.

To learn more about the risks and pitfalls of reducing an employee’s wages, please see Lowering an Employee’s Rate of Pay.

Implementing a reduced non-productive wage is very complex. It’s imperative that you take the proper steps to outline a detailed policy that protects you from future employment claims. For assistance implementing a non-productive reduced wage, contact an employment law attorney or HR professional.


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