Can an employer change original hourly wage when adding mandatory overtime to avoid paying overtime?

Submitted by hellorubydoo t3_10h0k94 in Pennsylvania

Hello, my employer is asking me to change my contract to add 8 hours of overtime. My pay was at $14/hr, but now states $12.92 with my overtime pay being $19.38, to average a final pay of $14.

They stated they can’t give overtime pay so this is a workaround to keep my pay the same but allow me to work more hours.

Google is failing me when I try to find answers on if this is allowed or not.

I know no one can offer actual legal advice, just hoping to maybe find some help in resources because I can’t find answers on this question lol

Thank you!

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Matt-33-205 t1_j55p7p8 wrote

I don't know if it's legal or not, it probably is only if you sign that new contract. However, It doesn't seem ethical. They are basically contracting you to work 8 more hours for the same net pay. It's a pure win for them, and a loss for you.

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hellorubydoo OP t1_j55pd02 wrote

That was exactly my thought as well. I didn’t sign anything. I just thought with overtime laws they couldn’t do that so I was surprised.

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WhereDaHinkieFlair t1_j568c81 wrote

I'm like 10 years removed from BLaw 101, so don't listen to me, but I would think it would be legal so long as you sign a contract with them.

But why would you sign a contract that doesn't benefit you? Like tell them that, "i'm not going to amend our contract to pay me less with no compensation." They at least gotta give you favorable scheduling or some other type of perks if they want you to concede something. But this is only assuming you're okay with changing jobs, because if you push back they might cut you loose.

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IamSauerKraut t1_j577pd5 wrote

>I'm like 10 years removed from BLaw 101, so don't listen to me, but I would think it would be legal so long as you sign a contract with them.

I believe there was a Comm Court ruling on a very similar issue within the past year that said something to the affect of "no, you cannot do that." The State Department of L&I could be contacted on this issue (I certainly would as it smells of a wage law violation).

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axeville t1_j56k4qg wrote

Signing a one sided contract does not mean labor law gets tossed out the window unless they are a de facto contractor. W2 employee is assumed if the employer controls the number of hours worked.

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SuggestAPhotoProject t1_j55ufkc wrote

Your boss is sleazy as fuck.

Time to find a new job that pays you properly and doesn’t try to steal from you. In this economy, it won’t be hard to find another $14/hr job.

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GratefulHead420 t1_j570bjq wrote

Do not sign this. They want you to work more, they can pay more. Most parts of PA you can make way more than $14 an hour

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MansourBahrami t1_j5887qa wrote

The McDonald’s around the corner from me starts at 14 an hour with all kinds of retention bonuses

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alvinsharptone t1_j57w2ei wrote

This is the correct answer. Do not accept anything less than what your doing especially if it requires overtime. NUTS TO THAT!!!!

there are plenty of jobs that are non contractual that pay 14+ per hour.

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hedgehogging_the_bed t1_j55s2ql wrote

No, they can't change your rates of pay unless you agree in writing before it happens. Contact the state labor board if they try. Especially if it's for hours you already worked.

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Kairenne t1_j560m0h wrote

This. Report to them. They know and will do something about it.

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RightfulChaos t1_j55uf5t wrote

I'm no expert but that sounds like bullshit

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Randya241 t1_j55vqin wrote

They are trying to get more work out of you for the same pay. Don’t sign anything and contact the Pa dept of labor. If they are doing it to you then im willing to bet others are having the same issue.

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cyvaquero t1_j58nl17 wrote

Always talk to your co-workers! The only one who benefits when you don't is the employer.

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petefromeastpete t1_j55v4ni wrote

Is this for work that’s already been performed or to apply to the future? Are you part of a union or collective bargaining agreement?

I suspect that it’s very wrong to change the agreement for work that’s already occurred, but in general they’re allowed to renegotiate new terms moving forward, and you’re free to take their terms, make a counter offer, or outright refuse. See question 11 at the DLI site, for instance

What motivation do they think they’re giving you for working more hours for the same pay, that’s ridiculous. Handling it with tact depends a little on how dependent you are on this job and how much you want to stay there, though.

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hellorubydoo OP t1_j561us0 wrote

Future work! And no Union. Thank you!

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petefromeastpete t1_j563nwl wrote

Then that’s pretty much it — they can try to change the agreement, you can reject that change, and what happens next depends on how valuable you to them are compared to how much you need that particular job. If you can find another job, which I would recommend at this point, tell them no you do not want to change your rate, and see what they say. I would say that doing that would lead to being fired outright or then making you so miserable that you choose to leave, though.

I am not an expert on unemployment compensation, but I believe if they were to fire you because you don’t agree that you would have a very good chance of being awarded UC, which could help while you job hunt.

These sorts of things rarely end happily — either they resent you for making more than they think you are worth or you end up staying somewhere you feel undervalued and mistreated.

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bwielblb t1_j567bzq wrote

Working you over like this at $14 an hour means they don’t give a single shit about you. If you can move on!!

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Odd-Neighborhood5119 t1_j55zxmv wrote

Your correct overtime should be 21.00 an hour. 14+7. Doing anything to make 50 hrs look like 40 is illegal

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tinymonesters t1_j57ejm3 wrote

Counter offer them you'll work 32 hours a week for $16 an hour so you make the same money but work less. Maybe they'll see the problem with what they're asking.

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Dredly t1_j55wayx wrote

Sounds like they are converting you to salary at 14.00 an hour in order to avoid OT rules.

If that is the case, they need to raise that number a lot.

(12.92×40) + (19.38×8) = 671.84

14×40= 560.

If they want you on salary, demand at a minimum 125% of that 671 number, as they will abuse it. Min 800 - 850 weekly salary

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hardtofindusernames t1_j57oeua wrote

Its not just about numbers though. There are labor laws that dictate whether a position is eligible to be salaried and exempt from OT or must be hourly subject to OT rules.

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yeags86 t1_j58d5lm wrote

Bingo. First company I worked for after college was salary and my manager forced OT on shit that was his job.

Maybe a year into being there we get switched to hourly and suddenly he was on your ass to clock out. I left about a year later and shortly thereafter got a letter from the DOL that I could take legal action if I choose to. Would have cost me more to get a lawyer for what amounted to a couple grand so I didn’t bother.

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rephaim_ t1_j56jv2c wrote

Might be time to take notice of other scams they're likely running. RUN

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AnotherUser297 t1_j572qfd wrote

Nope.

There was actually just a news story of a home care agency in Montco doing something similar. They owe their employees a lot of money.

the story is here

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CltAltAcctDel t1_j59o1hf wrote

> To avoid paying employees proper overtime, employers lowered the rate of pay for employees in weeks in which they worked more than 40 hours

That’s different than reducing their base pay across the board.

An employer can reduce your pay. What OP is describing sounds legal. Shitty, but legal

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AnotherUser297 t1_j59t5kr wrote

Correct, which is why I said it was similar. The employer is changing hours or pay to avoid paying overtime. Overtime is required for hourly workers, and messing with hours and changing pay is shitty at best and illegal at worst.

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CltAltAcctDel t1_j59xpwh wrote

But you answered the OP’s question with a definite nope and used that link to support your position.

Your link and OP’s situation are different. The company in the article was intentionally fluctuating wages based on employee hours to avoid paying OT. The base wage of the employees was entirely contingent on hours worked. More hour equaled lower hourly rate.

OP’s employer is permanently reducing wages. OP’s hourly rate will be the same regardless of hours work. An employer can legally reduce your wages; no law against that. The adding of mandatory OT puts it in a legal grey area. However, the employer is still calculating OT off of a static hourly wage so may be in compliance with the law.

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AnotherUser297 t1_j5a25bp wrote

OP’s employer is requesting a change in contract to avoid overtime. Employer said they can’t pay overtime, but really they don’t want to. Messing with overtime in any way is shady and worth pursuing legally. They want the OP to work more than 40 hours for the same money.

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hellorubydoo OP t1_j58zqoq wrote

Holy crap.

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bbm182 t1_j59ce4z wrote

The difference there is that they only reduced pay in weeks where overtime was required to be paid (likely retroactively as well) and went back to the normal rate in other weeks. You seem to be talking about a one time, permanent pay cut that will apply even if you don't work overtime in a particular week for some reason. That is likely perfectly legal.

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visitor987 t1_j567eew wrote

If the employer is big enough to be under federal rules no File a complaint with the wage and hour division of US Labor Dept https://www.dol.gov/agencies/whd/contact/complaints (You may file complaint(s) with both your state and US labor depts or either one). Even if you are paid back wages later the employer will still be fined for violating the law.

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Grumpicake t1_j56w1un wrote

Whatever you do, don’t sign anything. Follow the advice many people have given in the comment section, except for the aggressive stuff, don’t escalate. Don’t give them anything that could be used against you.

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ell0bo t1_j55xznn wrote

I'm no lawyer, but that sounds like clear wage theft to me.

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peeweejd t1_j56c40p wrote

AFAIK If your job is classified as non-exempt, you are eligible for overtime.

Your boss cutting your pay is suuuuper shitty.

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queenoftheidiots t1_j56de1e wrote

Call your state rep and state senator and see if they can also help you look into this. I have never heard of this before and it sounds wrong.

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Paladin936 t1_j56oyhn wrote

Technically, yes it is legal for them to lower your pay and require you to work overtime to continue receiving the same total amount of pay. They cannot do it retroactively. So any overtime you have already worked needs to be paid at $21.00 per hour. However, there is no reason for you to agree to or accept the change. If they reduce your pay, you should find another job.

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IamChantus t1_j56xgy5 wrote

It is probably legal for them to request a change in terms of the contract, but you are under no obligation to sign the new one. They do have the leverage of outright dismissing you. Depending on your work history over the past 15 months, that leverage becomes nearly null if you're financially eligible for unemployment. Basically of you've worked the entire past year (for any combination of employers, and made >$600 from this one). The actual rules are less ballparked than that, but check the FAQ on the DoL website to make sure.

Changing the contract benefits only the employer in this case. They want you to work an extra eight hours weekly for the same paycheck. There's honestly zero incentive for you to sign this new contract.

I would start looking for a new job regardless, they seem scummy.

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EveArgent t1_j58sbit wrote

"We want you to put in more hours and get nothing out of it, but we promise that it's what's best for all of us. " Fuck 'em. fuck that. Do not sign it. Say, no. You can either pay me overtime or I can work my usual schedule., but I'm not taking a pay cut because you can't budget.

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TSUTigers95 t1_j562hi7 wrote

Why would you have a contract for such a low rate. What is your specific job?

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psc1919 t1_j56fb9b wrote

So assuming you do not have a contract and your work is non-exempt, then your rate of pay for calculation of OT has to be your regular rate of pay (ie your normal rate). So any change is across the board and your base rate cannot be changed for only OT hours.

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JessicaDAndy t1_j56n1nq wrote

Are you asking for more hours? That changes what is going on.

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drumberg t1_j56rj4j wrote

It's not illegal to ask you to take less money. If they just do it without your consent it certainly would be. It's not illegal, but it is crappy to do. "Allowing you to work more hours" is not a thing if you aren't being paid for those hours. What hourly employee would think working an extra 8 hours per week for free was a net positive in their week?

Edit: On a related note...they're within their rights to fire you for whatever they want though so that also sucks.

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vogelsyn t1_j57az13 wrote

Report them they're screwing you

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Socketfusion t1_j58evb9 wrote

They are asking you to take a pay cut to avoid violating labor laws. So it isn't illegal, just incredibly unethical. Basically they want to pay you less for the first 40 hours so they can still pay you 1.5x for over 40 without actually paying you more total. If they were paying you $14 / hour for your first 40 and any OT, they were breaking the law and owe you back pay. They should have payed you $21 for any OT. There is a fair chance a former employee is suing them if that was the case.

I'm not a lawyer, but I deal with this as a manager and there have been lawsuits I was involved in. There is no possibility that you are exempt from overtime pay. Even if you met all the other criteria to be exempt, you don't get paid enough.

Up to you if you want to pursue any potential back pay. You can start with the state department of labor or maybe get a free consult from a labor attorney.

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Major_Bother8416 t1_j58hp2r wrote

If you sign the contract, it would be legal, but essentially they are asking you to take a voluntary pay cut in exchange for getting more hours. Say no. If you want the extra hours get a second job and they can complete for your time.

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KenMacMillan123 t1_j59meb8 wrote

There's no law that prevents them from lowering your pay. You should start looking for another job.

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RDGCompany t1_j5a0h3e wrote

What I tell every employer that complained about OT that the solution simple. When I hit 40 hours I drop what I'm doing and go home.

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TSUTigers95 t1_j55znen wrote

You have a contract. Are you talking about a new contract? They have to abide by your current contract. They can’t change it whenever they feel like it.

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tigerlily_223 t1_j56il7i wrote

If they can’t give overtime pay then don’t do overtime work. You deserve it if you work it. Don’t let them cheat you out of your time and money so they can save a couple bucks.

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axeville t1_j56jmm8 wrote

The fair labor standards act is designed to prevent this. Don't sign anything and call the us labor department employment standards administration and report it and ask for an audit.

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ruthfm t1_j56qkzq wrote

You can also try your local county bar association for pro bono help or the National Labor Relations Board.

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Neat-Beautiful-5505 t1_j56ubzz wrote

This is a pay cut…full stop!!! What happens when you don’t work OT?! Now you’re being paid less than before!

Don’t let the employer make you feel grateful to work OT. An employers job is to hire enough employees to cover the needed hours to complete the work. OT is for exceptional situations like you pour wet cement an hour before quitting time but you need to shape and form it before it sets which requires you to stay an hour longer. OT should not be used to avoid hiring additional workers. And an employer should def not be telling you to take a pay cut to work more fucking hours!

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DirectGoose t1_j57fcox wrote

They can't retroactively change it but they can for future hours. I'm assuming you don't actually have a contract as employment contacts are uncommon in the US unless you are very high up.

Hopefully you can find another job, there's no reason to agree to working more hours for the same money.

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Slight-West2591 t1_j57h0py wrote

Unfortunately it is legal for an employer to dock an employee's wage. However if it states in the contract that the reason for the pay reduction is to add mandatory overtime then there may be some labor laws broken. The figures you listed actually show they want you to work more hours for less money with their new wage it is around $100 less than if you remained at $14/hr and worked 8 hours OT. You work for a shitty company and should look for employment elsewhere.

Not sure what your job is or how many employees there are but you should consider unionizing, this is one of the many reasons unions came to be.

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ask_the_fisherman t1_j57myx8 wrote

If they lower your pay. You can collect unemployment in many cases. It depend on the contract. Talk to a lawyer. They cannot lower your wage without permission. This is bullshit what they are doing.

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nnnosebleed t1_j57zv97 wrote

Labor laws are strange and complicated.

My advice would be, if the company is trying to pay you the same for more hours, don't sign anything. If they want you to work overtime, then they should be paying you the same wage, plus overtime.

You don't owe them shit.

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incognitoville t1_j589qs1 wrote

NAL - IMO if you agree to it, especially in writing, then it is legal.

What are the ramifications if you don't do it?

I doubt your superiors are taking a cut in wages so why should you?

To me, if an employee should incur OT IMO they absolutely deserve that extra money. Hourly employees like that are usually the front line of the biz and to see them earn some extra cash is nice. It helps them.

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ellipses1 t1_j58e9qi wrote

What’s the deal with “contracts” for employment? I’m retired now, but I never signed a contract for a job. Especially not for a job making 14 bucks an hour

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mobitzIII t1_j58lqz3 wrote

  1. by agreeing to that you are basically buying them dinner, pulling down your shorts and taking a rogering while thanking them for the trouble.
  2. id be curious as to why they "cant give overtime" but ultimately my answer would be then i will not work overtime
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bga3481 t1_j59mwza wrote

Time to find a new job my friend! I doubt that's legal. It's definitely unethical and just ridiculous for an employer to even attempt. Don't even give them notice!!

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ExcitingRace t1_j5ad4d3 wrote

Any hours you work over 40 hrs needs to be paid 1.5x your current rate thats the law.

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ItsjustJim621 t1_j5cql5w wrote

This is fucking wage theft…plain and simple.

You’re at $14/hr. Your overtime rate is $21 per hour or 1.5 times your hourly rate….

I’d also ask this in r/legaladvice as well.

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No-Setting9690 t1_j5qi13e wrote

Contracts change a lot of rules. If they change it, you do not need to sign it. However, that usually means you'll be unemployed.

FYI, If you are not making at least 18/hr you're being underpaid. We hire zero experience for billing reps (all trained on job) starting at 18/hr.

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Dante2081 t1_j57nq99 wrote

Trying to save less than 2 bucks? Sheesh

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