An Administrator's Guide to California Private School Law

Chapter 6 – Wage And Hour Laws

1. N ON -E XEMPT E MPLOYEES For non-exempt employees, work performed between the 1st and 15th days of a month must be paid by the 26th of the same month. For work performed between the 16th and the last day of the month, non-exempt employees must be paid by the 10th day of the next month. 701 Additionally, pursuant to the FLSA, a non-exempt employee must be paid for all regular wages and overtime worked on the regular payday for that workweek. 702 If a non-exempt employee is paid pursuant to a 12 month contract but only works 10 months, there is a strong likelihood that at some point towards the latter part of the school year, the non-exempt employee will begin being underpaid for the time worked. This underpayment will become more pronounced up until the end of the school year, when the non-exempt employee may have a few or even several weeks of additional pay due after the end of the school year. A school may avoid this problem by either paying the non-exempt employee on an hourly basis based on time actually worked, often through 10 months, or by prepaying the non-exempt employee a certain amount at the beginning of the school year, so that the non-exempt employee never has a payday in which the school is in arrears in payment of wages. LCW Practice Advisor For a school to ensure that its specific payroll system or method complies with both state and federal law for non-exempt employees, the school should seek assistance from legal counsel. 2. E XEMPT E MPLOYEES Exempt employees must be paid once a month on or before the 26th day of the month during which the labor was performed if the entire month's salary, including the unearned portion between the date of payment and the last day of the month, is paid at that time. For exempt employees, unlike non-exempt employees, payment of wages is not tied to specific hours worked. Therefore, a school can avoid any wage and hour issues for an exempt employee who works a 10 month schedule but is paid over 12 months by classifying the two months of pay that occur before or after the school year as paid leave time. However, schools must ensure that teachers and other exempt employees are still paid a monthly amount that meets their applicable salary basis test if they are paid over 12 months to be overtime-exempt. H. C OMPUTATION O F R EGULAR R ATE O F P AY A ND O VERTIME Overtime is calculated based on the regular rate of pay. However, the regular rate of pay is not necessarily the same as the employee’s hourly rate or base pay. Rather, the regular rate of pay may include different kinds of remuneration or compensation provided to or on behalf of the employee. Schools and employees are not free to define or agree upon the employee’s regular rate of pay. 703 Rather, the regular rate of pay results from a computation that incorporates all forms of compensation paid to an employee, unless the form of compensation is excluded from the regular rate by statute. 704 A mere expression, therefore, of a “base rate”, “hourly rate”, or “regular rate” in an agreement is not dispositive of the actual regular rate of pay.

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 187