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BusinessColumnistsCarrie Mason-Draffen

Employees paid in 2010 for last year's hours

DEAR CARRIE: We pay our employees every Friday for the pay period ending that day. By a quirk in the calendar we have 53 weeks of pay periods this year. But employees are assigned an annual salary, and it's normally divided by 52 for weekly paychecks. This year do we divide the annual salaries by 53 or 52?  -- Math Quandary 

DEAR MATH: For answers I turned to a payroll expert and to the head of the U.S. Labor Department for both a business and labor law point of view.

Actually this is less of an issue than you realize, according to Yvette Hector, vice president of operations at Advantage Payroll Services in Freeport.

While it's true employees in similar situations will receive 53 checks this year, as opposed to the usual 52 because 2010's first Friday fell on a Jan. 1, the numbers even out because the workers would have received 51 weekly checks last year, Hector said.

"They aren't really paid an extra week," she said, "It's just allocated in a different year."

So your employees were essentially paid wages in 2010 for hours they worked the year before.

Labor law violations would be an issue if an employer cut out a pay period this year and hourly employees weren't paid for all the hours they worked or earned below minimum wage in that workweek.

"Their accounting devices are up to them as long as they aren't in violation of minimum wage or other wage-hour laws," said Irv Miljoner, who heads the Long Island office of the U.S. Labor Department.

Though their pay periods may even out, your company's employees face tax implications if their checks were dated Jan. 1. Though they may have worked the week in 2009, the wages will count as 2010 income, Hector said.

"It's the check date that matters," she said. "That is what governs the year the wages are going to be reported." 

DEAR CARRIE: My daughter has been a paralegal for three years. She worked from 9 a.m. to 5 p.m., but recently the office lengthened her schedule by an hour, to 8:30 a.m. to 5:30 p.m. without any extra pay. Is this legal? -- Para-Illegal? 

DEAR PARA-ILLEGAL: The expanded hours with no pay could be illegal, depending on her status.

If she falls into the professional category and therefore is exempt from the minimum wage and overtime, the company doesn't have to pay her for the expanded hours.

But it's unlikely she falls into the professional category unless she is a lawyer performing paralegal work, said Miljoner of the U.S. Labor Department. If she isn't a lawyer, she could well be entitled to payment for that extra time.

"There have been legal decisions that found they [paralegals] don't have professional exemption," Miljoner said.

Employees, such as lawyers, who qualify for the professional exemption have to have a degree in some field of higher learning, Miljoner said. "Having a paralegal certificate doesn't qualify as such," he said.

Other criteria professional employees have to meet include performing work that is "largely intellectual in character and involves the application of independent judgment and discretion," he said.

As for paralegals, "they might use legal documents following pro forma models," Miljoner said. "They don't really use independent judgment and discretion."

Miljoner admits paralegals "get a little sensitive about not being categorized as professional." But he added, "It's actually to an employee's benefit to not be categorized as professional."

For more on the professional exemption go to:

http://www.dol.gov/whd/regs/compliance/fairpay/fs17a_overview.pdf. (Click here to connect.)

For more on hours worked go to: http://www.dol.gov/whd/regs/compliance/whdfs39c.pdf. (Click here to connect.)

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