Monday, September 19, 2011

What would Jesus pay? Day rates under the FLSA

So I sat in church yesterday morning listening to the parable about the workers in the vineyard. Since I’m Jewish and haven’t spent a whole lot of time inside churches, it was the first time I had ever heard this story. For those, like me, who aren’t familiar with it, the story concerns a man who, after hiring various workers to tend to his vineyard for an agreed day’s wage, paid them each the same amount, regardless of how many hours they actually worked. Those hired in the morning and worked a full day received the same wage as those hired late in the day who only worked an hour. Upon hearing this story, I thought two things: 1) Jesus might have been the world’s first socialist, and 2) this story would make really good blog post. So as not to rankle any more feathers than I already have, I’m not touching number one with a ten-foot poll. But, I will take on number two.

There is nothing illegal about paying a “day rate”—that is, a flat sum for a day’s work, without regard to the number of hours worked. Under the Fair Labor Standards Act, a day rate simply affects how an employer must calculate an employee’s regular hourly rate of pay for a work week. An employer calculates the regular rate for an employee paid a day rate by totaling all the sums received at such day rates in the work week and dividing by the total hours actually worked. As with any non-exempt employee, that regular rate cannot fall below the minimum wage. And, if an employee paid a day rate works more than 40 hours in a given week, the employer must pay time-and-a-half on top of the regular rate for any hours worked over 40.

Simple enough, even for a Jewish boy like me.