can overtime be paid with vacation instead of wages?
“Banking hours” (offering future time off or additional vacation time) nstead of paying overtime wages is illegal in most states. Employers do this in order to avoid paying higher payroll taxes. If your employer asks you to do this, you may be entitled to back OT pay, and your employer will also be liable for penalties and taxes. Offering comp time in lieu of time-and-a-half pay is illegal in California, according to this article. By the way, this is one labor complaint that usually receives quick attention when the whistle is blown, because the State is always eager to collect any money it is legally owed.
Can you be considered a professional employee exercising your own idea judgment in your work? If so, you are an exempt employee under FLSA requirements. That’s the closest category I could consider you under. State laws here are irrelevent since you’re non-exempt under federal law. It doesn’t matter if state laws are more liberal since you’re already covered under all federal labor laws (including paid overtime). I’m going to guess the answer is no – both from your description of your work and from the fact that your employer even bothers to do anything with your overtime. If they really thought you were exempt, they’d probably not even both to do that. To answer your question, as a non-exempt employee, overtime needs to be paid at 1.5x your normal wage in cash. So, yes, what they’re doing is illegal. However, as you’ve already noted, if you become a whistleblower, you will probably lose your job. As I’ve previously stated, employment lawyers love these sorts of cases – you get your mo
It sounds like your boss isn’t allowed to have his staff work overtime, so he gives it to you as under-the-table vacation time to keep if off the books. Your HR department probably doesn’t know he is doing this and would be pissed if they found out. As much as I try to avoid circumventing the chain of command, you might have to do it in this case. Go talk to HR or your bosses boss and try to get it worked out that way.
If it’s under the radar, it’s probably fishy. The question is, do you care? If you trust your boss to be fair with these hours and you are allowed to use up your secret hours before dipping into your real vacation hours, it’s possible that it works out better for you than the minuscule extra pay would. Now, for the fun ethics of the situation. You are pretty sure they are doing something illegal, right? I think then it’s your ethical duty to tell someone in the company HR department about it. Looking at it hyper-technically, not only is the company skirting their tax burden, but you are too. Being a weak person, I would of course report this anonymously. But letting it go because it benefits you now, and then reporting it in the end for the big payout seems a little shady to me. Report it now, or never. Interesting. I used to work in a union position for a local government entity, and always got comp time at time and a half in lieu of overtime pay. I.e. If I worked 46 hours in a week,
