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changing the salary
rules
by Dr. Lynne
Curry
Question:
We’ve got a
couple of salary employees in our firm who insist that salary
people who work more than 40 hours weekly need to be compensated
for it with comp time. We’ve been resisting this and maybe we’re
old school managers. Could you help us out here?
Answer:
You potentially fall into three traps when you allow exempt
employees to consider any hour they work above forty weekly to
require compensation.
First, when you
set their salary, you probably set it higher than you would have
for an employee you thought might only work forty hours. Thus,
if you give these salary employees extra compensation when they
work as you planned they would, you give them a raise, and may
need to give your hourly employees and the others on salary a
pay hike or extra time off as well if you want to keep pay
equitable.
Second, if you
compensate their hours above forty, you may call into question
their exempt or salary status. According to the January 24, 2004
HR Matters E-tips edition, at least some courts have held that
otherwise exempt employees who receive extra payments because
they work more than forty hours need to be considered non-exempt
and thus subject to overtime rules. While two courts ruled
otherwise, when you start routinely compensating a salary
employee for extra hours, you run a risk.
Third, you risk
changing the way your other salaried employees view what you
expect of salary employees. Most salary employees routinely work
more than forty hours, recognizing that salary status means
“work until the job’s done or at least give it your best shot.”
Thus, if you change the rules for these two workers who think
salary means “I go home at five daily or you need to compensate
me,” you allow them to redefine what salary means.
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