What if the regular rate falls below the minimum wage?
If an employee’s regular rate is less than the minimum rate, then the employee’s straight-time earnings will have to be adjusted to conform with the minimum wage requirement and the employee must be paid overtime on the basis of one and one-half times the minimum. So, if the employee’s regular rate falls below $7.25 per hour, you will have to adjust the employee’s pay upward so that the regular rate is at least $7.25 per hour, and you will have to pay the employee time and a half based on the minimum wage rate of $7.25 (in other words, at least $10.88 per overtime hour). Counting time-off pay toward the minimum wage. Can you credit holiday and vacation pay toward meeting the minimum-wage obligation? In other words, when you’re adding up the hours an employee worked in a week, can you include a paid day off? No. The reason is that the federal law requires you to use compensation for “hours worked” and holiday or vacation pay is not paid as compensation for hours worked. Suppose you’re t
