Employee classification
KStater
20 Posts
I've read through most of the postings regarding exempt vs non-exempt/salaried vs hourly, but I don't see anything like my situation. I work for a small, private, not-for-profit employer in Missouri. The upper management just informed me that they have changed the status of one of our part-time hourly employees; to what I'm not sure. Here's what they told him, in writing:
They will assure him a salary (not an hourly wage, a salary) for a minimum of 15 hours in a two-week pay period. They proceed to explain how this salary translates into dollars per day or hours per day. If the employee works more than the minimum hours in a pay period, they'll pay him by the hour for each hour over the minimum. If the employee doesn't work any hours because there's no work, they'll still pay him the base salary for that pay period. He can no longer earn sick or vacation time due to the reduced number of hours (though our handbook says even if you work less than 10 hours per week, you can still accrue sick and vacation time on a pro-rated basis). They've told him he's entitled to this arrangement until the end of the year, at which time they'll evaluate the need to continue it.
To me, this arrangement seems to be riddled with problems. It seems as though this sets up an "employment contract," since it's guaranteed for a year. We did have a similarly situated employee of a different race and sex, and when there didn't appear to be enough work to keep her busy as part-time, she asked for her status to be changed to "on call." Management agreed, though she was not guaranteed a certain number of hours or pay if she didn't work. The on call employee has been here a much shorter period of time, but we don't have an established seniority program (you can accrue more vacation and sick time the longer you work here, if that counts as a seniority program). So there seems to be a possible discrimination problem, aside from not following the established policy for vacation and sick leave accrual. The employee who got this arrangement is a custodian, responsible for opening and closing the building after hours (with no supervision) and some clean-up; his duties are not changing.
So I'm thinking he's not exactly salaried exempt, because the position doesn't qualify as exempt. And since he's part-time, he doesn't set his own schedule, and he doesn't work if there's no need for him, he can't be paid a weekly salary. And no, this letter was not reviewed by counsel before they gave it to this employee. Am I missing something here? Isn't there a FLSA problem with this arrangement? If there is, please give me chapter and verse, because they'll never believe me without it. Thanks in advance for your help!
They will assure him a salary (not an hourly wage, a salary) for a minimum of 15 hours in a two-week pay period. They proceed to explain how this salary translates into dollars per day or hours per day. If the employee works more than the minimum hours in a pay period, they'll pay him by the hour for each hour over the minimum. If the employee doesn't work any hours because there's no work, they'll still pay him the base salary for that pay period. He can no longer earn sick or vacation time due to the reduced number of hours (though our handbook says even if you work less than 10 hours per week, you can still accrue sick and vacation time on a pro-rated basis). They've told him he's entitled to this arrangement until the end of the year, at which time they'll evaluate the need to continue it.
To me, this arrangement seems to be riddled with problems. It seems as though this sets up an "employment contract," since it's guaranteed for a year. We did have a similarly situated employee of a different race and sex, and when there didn't appear to be enough work to keep her busy as part-time, she asked for her status to be changed to "on call." Management agreed, though she was not guaranteed a certain number of hours or pay if she didn't work. The on call employee has been here a much shorter period of time, but we don't have an established seniority program (you can accrue more vacation and sick time the longer you work here, if that counts as a seniority program). So there seems to be a possible discrimination problem, aside from not following the established policy for vacation and sick leave accrual. The employee who got this arrangement is a custodian, responsible for opening and closing the building after hours (with no supervision) and some clean-up; his duties are not changing.
So I'm thinking he's not exactly salaried exempt, because the position doesn't qualify as exempt. And since he's part-time, he doesn't set his own schedule, and he doesn't work if there's no need for him, he can't be paid a weekly salary. And no, this letter was not reviewed by counsel before they gave it to this employee. Am I missing something here? Isn't there a FLSA problem with this arrangement? If there is, please give me chapter and verse, because they'll never believe me without it. Thanks in advance for your help!
Comments
Sounds as if the company wants to pay the employee a salary for 15 hours (every week). Sounds as if the company is willing to pay straight time rate for any hours worked in excess of 15 but it doesn't sound as if they expect the employee to worke more than 40 in a week. Sounds as if the company will not be making any deductions from the salary for absences of any kind. And that's part of what makes a "salary."
The question then is the employee going to be exempt or non-exmept. The default is non-exempt and the company would have to establish that the emplyee should be exempt (using either the long or short test). Sounds as if you've determined that it is non-exmept.
As long as the employee constantly works under 40 hours a week, the difference between exempt and non-exempt won't be critical, as long as they keep paying the salary for the week regardless of whether or not he is absent.
FLSA does permit a salaried, non-exempt status, which this sounds like it may be. If he ever does run over 40 in a week then he will be entitled to time and a half, which can be calculated using the method described in the Code of Federal Regulations, 29CFR778.113.
[url]http://frwebgate.access.gpo.gov/cgi-bin/get-cfr.cgi?TITLE=29&PART=778&SECTION=113&YEAR=1998&TYPE=TEXT[/url]