Do I Have To Pay Flat Rate Employees For Callbacks?
Question: I had a follow-up question to the one someone asked about pay for techs on callbacks. You stated that for hourly pay employees you could not pay them when they went back to fix a mistake, etc., but what if you pay by flat rate? Aren’t your employees then sort of a subcontractor and need to go back for no pay to fix their mistake?
Answer: Nice try—but no cigar. It would be pretty obvious that the employee’s status had been changed to that of subcontractor just to recoup the callback pay. Now, what you can do is pay only minimum wage for callbacks. And you’re free to discipline them in some other way for their poor work. Also—be very careful in general about who you deem as subcontractors or independent contractors as opposed to employees. The rules are complicated and the downside risks are high. Another caveat—flat rate pay raises questions under the Fair Labor Standards Act, for example, how to treat overtime worked by techs on a flat rate.
This response is intended for general informational purposes only and should not be construed as legal advice or a legal opinion, nor is this column a substitute for formal legal assistance. For help with particular legal needs, members are invited to consult with Brooke Duncan III of Adams and Reese LLP. Mr. Duncan can be reached at 504-585-0220 or by email at firstname.lastname@example.org.
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