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Specific issues which often arise when addressing proper overtime compensation:
1. The standard for calculating overtime hours is based upon a single workweek. An employer
is not permitted to average the hours worked by an employee over two or more weeks,
regardless of the pay schedule utilized by the employer.
2. Bonuses, which are considered part of the regular rate as remuneration for employment
(paid in lieu of wages) are included in determining the regular hourly rate of an employee
for purposes of computing the proper overtime compensation. However, gifts, rewards for
services, discretionary or special occasion bonus, reimbursement for expenses, employer
benefit contributions and pay for foregoing holidays and vacations are not included when
determining the regular rate of pay for overtime calculations.
3. When an employee works in two or more different jobs, with different rates of pay, in a single
work week, the regular rate for that week is the average of the combined rates, i.e. the total
earnings from all employment positions are combined and then divided by the total number of
hours work in all jobs. This figure is then utilized to calculate overtime pay.
Compensatory Time
In Vermont, there is no legal provision pertaining to the use of compensatory time in lieu of overtime payments.
As such, questions or issues arising under this topic should be directed to the U.S. Department of Labor.
Generally, under the federal provisions, comp time may only be utilized in limited circumstances.
On Call Time
In Vermont, the statues are also silent as to the compensation of employees for “on call” time. However, under
federal law, for an employee to be compensated for their on call time, their liberty must be more than slightly
restricted, meaning he/she cannot use his/her time effectively for their own purposes. Carrying a beeper or
merely leaving a telephone number does not qualify for on call compensation.
Travel Time
As the Vermont statutes do not address compensation for travel time of employees, we defer to the federal
regulations in this area. Generally, in determining whether travel time is working time, the kind of travel
involved is evaluated. Ordinary home to work travel, which is a normal incident of employment, is not
compensable. However, several instances of travel time are considered work time for which the employee is
due proper compensation. For example, if an employee, after completing his/her day of work and returning
home, is summoned and travels for a substantial distance to perform an emergency service for the employer,
this travel time is compensable. In addition, in most circumstances, travel for a special one-day assignment in
another city, travel all in a day’s work and travel away from home when it cuts into the employee’s workday are
all considered working hours for the employee.
“Service and Tipped” Employees
A “service or tipped employee” means all those, in either hotels, motels, tourist places, and restaurants who
customarily and regularly receives more than $120.00 a month in tips for direct and personal service. This
means, if an employee who does not regularly receive more than $120.00 a month in tips, the employee must
be paid an hourly wage equal to or exceeding the minimum wage rate.