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I got an offer letter and contract from my current employer. The offer letter states "The salary is $115,000 annually, paid monthly."

I am currently working as contract to hire, and I have a 1099.

The first week I worked about 45 hours, the second week around 39, the third week around 60, and the last week around 30. Pretty standard.

My pay should be roughly 115,000/12 = 9583 a month.

For the first 2 months now, I got one check for 7500 and one for around 7800. When I brought up my concerns I was told I don't do 40 hours every week, and they aren't going to pay me salary when I don't put in all the hours.

2 questions,

  1. Are they right?
  2. If they are wrong, and I think they are, if I continue working there am I agreeing to the changes if they are not written out and signed by both. Do I give up my rights to the proper agreement we had?
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  • Is that number the amount on the check, or the gross (before taxes and benefits) amount?
    – Ron Beyer
    Dec 29, 2021 at 4:52
  • Gross amount without any withholding Dec 29, 2021 at 4:53
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    You're a contractor. So what does your contract say? Dec 29, 2021 at 5:02
  • I was originally being hired full time, and I asked them to do a 30 day contract to hire. My contract states a start date in october, and moving full time after 30 days. It says just what I said above with pay, 115,000 annually, paid monthly. Dec 29, 2021 at 5:08
  • In what state? Labor law is different in different states. The broad outlines will be the same, but some details will vary. I am thinking about details such as measuring, recording, and reporting your hours. How do they know you worked fewer than 40 hours? Do you and they agree about how many hours you worked? If they're basing your pay on your hours, did they calculate overtime for the week in which you worked 60 hours? If not, why not?
    – phoog
    Dec 29, 2021 at 13:57

1 Answer 1

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The Company is performing wage theft

I have never heard of a wage method that pays a salary according to hours but doens't pay for hours over 40. Monthly Salary, by definition, is paid regardless of hours. Your contract doesn't give hours, it just gives a monthly total. That's a contract, and you should be paid according to the contract. In terms of fairness, it certainly isn't right to dock pay for weeks you worked less than 40 but not give you credit for weeks you wored more than 40.

Now, it's not clear if you moved to direct employment for the second month. If you did, the first month would be a contract violation, and the second would be a violation of wage & labor law. A company can't pay you salary as an exempt (exempt from hourly wage laws, like management) employee and also dock you pay according to hours worked.

So what can you do? If you are still a contractor and actually want the job, not much more than arguing with payroll. Since you (why?) decided to be a contractor instead of a direct hire, you have exactly zero protections to getting let go. If you are a direct employee, you have protections from bringing action about being paid fairly, though your long-term prospects there would be problematic if you have to take the company to task using the government.

Any HR rep should know all of the above. But never just go to HR without talking to your manager first. Remember that HR works for management, and working against your manager is generally a bad career move.

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  • While it's likely that this could be technically considered wage theft, I'd bet it's more likely a screw up in payroll because the OP requested the change from direct hire to contract for the initial 30 days.
    – Peter M
    Dec 29, 2021 at 15:16
  • It’s not. The company is only 3 people. 1 dev, myself, and the owner. Dec 29, 2021 at 17:23
  • In that case, they are clueless about wage laws and need to get with the program.
    – Tiger Guy
    Dec 29, 2021 at 18:58

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