Overtime BuyOutCan someone explain how a OT buyout is calculated? Thanks!
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Can you explain what OT buyout is??? Is it where you put in extra time when you are on salary and get some sort of compensation for it? Is it what they add to your pay if you move from non-exempt (qualified for overtime) to exempt (no OT)? Or are you talking about calculating some sort of negotiated price for accumulated overtime? Paul W. Barada The Negotiation Expert
Yes. I may be moving from a non-exempt to exempt position and my manager said they will "buy-out" my overtime when the move happens.
That means that any accumulated overtime compensation that's due you will be paid either for the full amount due, or there will be some negotiation for a lump sum payment less than the full amount. It just depends on what the company policy is regarding overtime buy outs. But I think you can assume that it will either be equal to or less than the full amount of the overtime pay to which you are entitled. Hope this helps. Paul W. Barada The Negotiation Expert I don't think this represents buying out accumulated OT. If you are non-exempt now, they owe you what ever overtime you worked. It has to be in your paycheck. I thing what they are talking about is the fact that you may work an average of X hours per week in OT. By moving to exempt status, you won't get paid OT so your paycheck would decrease. What they want to do is factor in your overtime into your salary so you stay whole. Example... You work 45 hours per week and make $10/hour for regular time, $15/hour for overtime. In this case your gross pay would be $475/week. or roughly $24,700 per year. If they changed you to exempt at your $10/hour pay, you would make about $20,800 per year. They want to make sure you are closer to the $24,700 figure. There is one simple explanation none of us has mentioned yet, you could ask the person who proposed the buy-out how it works. Just be honest and say you're not familiar with how overtime buy-outs work and ask him/her to explain it to you! Whoops, just thought of another way! Check the company handbook or policy manual and see if the subject is addressed there first. Paul W. Barada The Negotiation Expert | |
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