Exempt worker does specific projects
RuthG
117 Posts
We have an exempt employee who can work anwhere from 0 to 35 hours per week (sort of on a per project basis). Typically he is under 30 hours per week but occasionally goes over. Is there a way to pay him when he goes over 30 hours and still meet the FLSA guidelines?
Comments
Administrative and professional employees may be paid on a fee basis rather than on a salary basis. To determine whether the fee payment meets the minimum salary threshold, the amount paid to the employee should be tested by determining the time worked on the job and whether the fee payment is at a rate that would amount to at least $455 per week if the employee worked 40 hours.
Examples:
(1) A singer receives $50 for a song on a 15-minute program (no rehearsal time is involved). The requirement will be met, since the employee would earn the requisite amount in far less than 40 hours.
(2) An artist is paid $100 for a picture. Upon completion of the assignment, it is determined that the artist worked 20 hours. Because earnings at this rate would yield the artist $200 if 40 hours were worked, the $455 minimum was not met.
In your case, you would want to estimate as closely as possible the number of hours he would work each week and determine either (1) the fee basis based on that estimate or (2) a weekly salary that would over time balance out (meaning one week he might be working fewer hours, but the next week additional hours, and over time it would balance out with the chosen weekly salary).
29CFR541.605 talks about the fee basis as described in the post
above. The poster above did show one side of the coin...but there is
another. There is another major caveat that was not posted above that must be met to use the fee basis:
"Administrative and professional employees may be paid on a fee
basis, rather than on a salary basis. An employee will be considered to
be paid on a ``fee basis'' within the meaning of these regulations if the employee is paid an agreed sum for a single job regardless of the time required for its completion. These payments resemble piecework payments with
the important distinction that generally a ``fee'' is paid for the kind
of job that is unique rather than for a series of jobs repeated an
indefinite number of times and for which payment on an identical basis
is made over and over again. Payments based on the number of hours or days worked and not on the accomplishment of a given single task are not considered payments on a fee basis."
Based on the OP.....you need to make sure that your fee basis
is NOT by the # of hours worked otherwise it doesn't meet the fee
criteria.
THAT
SAID.....what you can do is pay an exempt salary with an understanding
that the employee will work a certain # of hours and give a bonus for
any hours worked over that amount.
http://www.dol.gov/dol/allcfr/ESA/Title_29/Part_541/29CFR541.604.htm:
"An employer may provide an exempt employee with additional
compensation without losing the exemption or violating the salary basis
requirement, if the employment arrangement also includes a guarantee of at least the minimum weekly-required amount paid on a salary basis.
Thus, for example, an exempt employee guaranteed at least $455 each
week paid on a salary basis may also receive additional compensation of
a one percent commission on sales. An exempt employee also may receive
a percentage of the sales or profits of the employer if the employment
arrangement also includes a guarantee of at least $455 each week paid
on a salary basis. Similarly, the exemption is not lost if an
exempt employee who is guaranteed at least $455 each week paid on a
salary basis also receives additional compensation based on hours
worked for work beyond the normal workweek. Such additional compensation may be paid on any basis (e.g., flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis), and may include paid time off."