Amendment needed to fall in line with Fair Labor Standards Act requirements
By Kellen Olshefski
Editor
The City of Elkhorn Human Resources Committee voted in favor of adjusting it’s compensation plan to fall in line with requirements of the Fair Labor Standards Act at its meeting Monday night.
According to a memo to the committee from City Administrator Sam Tapson, while under the city’s compensation plan a performance bonus, a one-time lump sum payout, is not added to the base pay, and not reflected in overtime earnings, Fair Labor Standards Act regulations require the bonus be embedded in the employee’s overtime pay rate.
Because of this, Tapson said the city would need to maintain two pay rates; one for base pay and one for Fair Labor Standards Act overtime rate.
As an example, Tapson said in his memo a $1,000 performance bonus would as $.48 per hour to an employee’s pay rate for overtime purposes, $1,000 over 2,080 hours. As a result, he said an employee whose base pay is $25 per hour, would receive overtime pay at the rate of $25.48 at time and a half.
Tapson said Monday night in amending the city’s compensation plan, the change would be backdated to Jan. 1, bringing city employees at their maximum base pay, who are eligible to receive a performance bonus and would have been affected by this, up to date in terms of pay.
While Tapson said it’s something the city has to do, being it’s the law, it had to come before the committee for passage as amending the plan calls for a resolution passed by the City of Elkhorn Common Council.
Because it’s a performance bonus applied on the anniversary date of an employee, the bonus would be included in the employee’s overtime pay for the upcoming year.
Following a question from Alderman Scott McClory, if the employee were to not gain a performance bonus the following year, Tapson said the bonus would not be included in the employee’s overtime pay in the coming year.
