Employers are free to set pay structures as they see fit, as long as they are still complying with the minimum wage and overtime provisions of the Fair Labor Standards Act and any state labor laws.

1099 Worker / No Payroll Taxes Withheld

Generally, if an employer is not withholding payroll taxes from a worker’s pay, this means the employer has classified the employee as an independent contractor. See the following for a discussion of the factors to be considered when determining if a worker is properly classified as an independent contractor. Overtime Pay Laws for Independent Contractors.

Flag Rate

Under the flat rate and flag rate systems, a customer is charged a certain number of assigned or “booked” hours per job, regardless of the actual time it takes the employee to perform the job. The employee is then paid a set amount of money for each flagged hour completed. Auto Mechanics & Technicians And FLSA Overtime Pay.

Piece Rate

Under this structure, a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. What is the FLSA Overtime Rate.

Tip Pay

When an employee receives tips in additional to hourly pay, employers must comply with specific restrictions regarding tips and tip pools in order to take a credit against minimum wage. The Fair Labor Standards Act Protects Your Rights To Tips and
Department of Labor Updates Tip Credit And Half Time for Overtime Regulations.

2 Different Jobs at different rates

If a worker does two different jobs for the same employer and is paid at different rates, the regular rate of pay is calculated by averaging the rate based on the hours worked at each job or using the rate for the specific job worked after 40 per week Calculating Overtime FAQs.

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