Q: Our company is at a crossroads. We've planned a special project that will save us -- or break us.
To make it happen, we've asked four of our exempt employees to put in 60 to 80 hours a week for a period of one to three months. This is causing some angst, particularly as we don't know how long this project may last. We're in our third week and the work has already proved to be more complicated than we expected.
Two employees we tapped for extra work initially suggested we instead use a temp agency or hire some additional staff. We placed an ad but the best applicants turned down the short duration jobs and decided we didn't want to hire mediocre applicants. The temp agency had some good people but the agency charged such exorbitant fees we decided against using temps.
Our employees then suggested we award them future compensatory time off on an hour for hour basis for the extra work or at least temporarily increase their salaries. What's best?
A: Reward your employees with a flat-sum bonus -- or you may risk compromising their exempt status.
According to employment attorney Renea Saade, Washington law allows employers to pay salaried employees a bonus or to earn additional time off for additional hours works. However, if you raise and then lower these employees' salaries or give them future compensatory time off for extra work, particularly if it's done on an hour for hour basis, you send the message that you consider these employees similar to hourly employees and potentially invalidate their salary basis requirement.
You can also create a profit-sharing program and give all your employees a piece of the action.
Q: One of our salaried employees comes in late and then leaves for extended hours during the day, yet still claims a day of pay. We've been told we can't dock his pay because his job classification fits exempt status.
If this happened once in a while, we wouldn't mind it, but he does this as a regular practice, claiming he works some evenings and comes in on the weekends. While he does work some weekends, it doesn't make up for all of his work week absences. Meanwhile, he banks all of his PTO and thus takes long vacations. Our other employees initially resented this, but recently one or two have started to follow his pattern.
Since he gets great results when he's here, we don't want to strictly enforce the work week and at the same time need to make this fair for our other exempt employees.
A: Neither Washington law nor the Fair Labor Standards Act requires employers to provide employees vacation pay. As a result, employers elect to give paid time off (PTO) -- or not -- and create their own policies for doing so. When employees take time off in the form of partial days, the employer may automatically deduct the time from the employees accrued PTO.
Exempt (from overtime) employees often work into the evenings or on the weekends. In return, they generally receive higher pay than hourly employees and don't get docked when they leave work for short appointments. Although employers can't dock exempt employees' salaries for partial day absences, they can dock the employees' accrued paid time off (PTO) bank. Before doing so, meet individually with your exempt employees who currently use the greatest workday flexibility and then learn their thoughts. Then, create a policy outlining clear workday and work week expectations. If you allow flexibility to any employee and don't allow other employees the same rights, you risk morale issues. Further, according to employment attorney Renea Saade, you potentially expose your company to claims of discriminatory treatment.
-- Lynne Curry is a management trainer, consultant and president of Alaska's The Growth Company Inc. in Anchorage. Email her at firstname.lastname@example.org.