NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

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(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 320 and SB 338

SOURCES OF INFORMATION

LFC Files

State Personnel Office (SPO)

Department of Labor (DOL)

SUMMARY

Synopsis of Bill

House Bill 500 amends Section 50-4-22 NMSA 1978, the Minimum Wage Act, to allow a method of calculating an hourly salary for fixed salary employees who provide investigative services for the federal government. House Bill 500 states the hourly rate shall not be less than the federal minimum wage.

Significant Issues

House Bill 500 amends the Minimum Wage Act to be in conformity with the Fair Labor Standards Act.

OTHER SUBSTANTIVE ISSUES

According to the Department of Labor:

Under the law of 47 states and under federal law a specific method of computing overtime hours and pay is permitted when an employee has a fixed salary and no specific number of hours in his workweek. The fixed weekly salary is divided into the number of hours worked to determine the hourly rate. The hours over 40 are considered overtime and entitled to be paid at 150 percent of the hourly rate. For example, an employee with a salary of $45,790 per year or $880 per week works 44 hours; his hourly rate is $20 per hour and his four hours over 40 are paid at $30. Therefore, his total pay for the week is $920 -- 40 hours at $20 and four hours at $30.

The New Mexico law has been interpreted administratively not to permit the above method of computation. The employer affected by this bill, which operates nationally, is seeking to treat its employees uniformly across the country, to the extent possible. It has approximately 20 employees in New Mexico, all of whom are relatively highly compensated. This bill will permit the company to use in New Mexico the described method of computing overtime which, as mentioned previously, is permitted in 47 other states. As far as is known, only one company has complained about the inconsistency between New Mexico's law and the overtime laws of other states, and it is the only company this bill affects.

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