Can we pay a different hourly rate for training? 07-07-2010
If employees are attending a mandatory training seminar, can you pay a different hourly rate than their normal rate? I have heard this in the past. This is for NJ.
Ann Kiernan replies:
The federal Fair Labor Standards Act allows different hourly rates for different work, as long as the employer and employee agree on the rates before the work is done. See, e.g. Department of Labor FLSA Opinion letter 2006-10. Of course, time-and-a-half overtime must be paid if more than 40 hours are worked in a week. If the training is what puts the hours over 40, then the training rate can be used to figure overtime; otherwise, overtime is paid at the regular rate.
I could find no New Jersey case, statute, regulation, or opinion letter on point. New Jersey requires OT to be paid at 1.5 times the "regular hourly wage". The regulation on overtime does say that "If an employee is remunerated solely on the basis of a single hourly rate, the hourly rate shall be his or her 'regular hourly wage'", which implies that an employee could have different rates for different work.
I am guessing that you want to pay less for training time than for work time. The larger question is: Even if doing so is legal, do you really want to send the message to your employees, that training is not worth as much as regular work?
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