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Private13699

   
Part-time Exempt Employees   
Posted: 08/19/2009 02:04pm   1123 Views
  

Does anyone currently have part-time exempt employee working for your organization?  I understand that this classification is rare but, I need to create one and I am looking for best practice from you.   I am considering using the 50% reduction in appointment, 1/2 the annual salary of the full-time equivalent.   I am hoping that this won't jepordize the exemption status as the position will have the same accountabilities and decision making requirements of its full-time counterpart.  Please Advise.

 


Private34235

   
Part-time Exempt Employees   
Posted: 08/19/2009 02:21pm   Revised: 08/19/2009 02:22pm  
  

 

Under federal law, to be exempt, the employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week.

 http://www.dol.gov/esa/whd/regs/compliance/fairpay/fs17a_overview.pdf

Also check state law.


Private10775

   
Part-time Exempt Employees   
Posted: 08/19/2009 04:32pm  
  

We have exempt part-timers.  Most of them are lawyers in our Law Department.  We also provide a lower relative rate of pay, but it's not a flat 50%.  It depends on the number of hours that the part-timer and company agree to.   For example, if the agreement is to get at least 30 hours of work a week instead of 40, then the rate is reduced to 75% of the full-time rate.  


Private12496

   
Part-time Exempt Employees   
Posted: 08/20/2009 08:03am  
  

I've worked in three different organizations with part-timers classified as exempt, so I can't it's that rare.  The real thing to watch for is that you don't treat the part-timer as a non-exempt employee.  In one case I was close to, the employee worked fairly regular hours in a week as Benefits Manager (though with lots of flexibility with regard to the hours worked on a particular day; in the end she consistently worked, and was paid for, 30 hours per week), so there was no problem with the exempt status.  In another case, both the employer and the employee wanted the employee treated as non-exempt, that is, paid for hours worked, in this case, the employee was clearly in an exempt eligible role, but, because she was paid for hours worked (20 hours this week, 32 hours next week, etc.) we had to classify, and pay, as non-exempt.


Private10775

   
Part-time Exempt Employees   
Posted: 08/20/2009 08:15am  
  

Ed,

Just on principle I would direct your payroll accounting experts to come up with a way to pay straight time pay for exempt overtime, not time-and-a-half.  I would even consider only paying the straight time pay up to the 40 hour/week level and then nothing after that for part-time exempt employees. 

To get into the business of paying 1.5x overtime for exempt employees - whether full-time or part-time - sends a confusing signal.  By paying straight time, its clearly a company policy, not an FLSA-mandated policy.

Paul 


Private12496

   
Part-time Exempt Employees   
Posted: 08/20/2009 08:44am   Revised: 08/20/2009 08:44am  
  

Paul,

Looks like we may have a lively conversation starting (though I'm not concerned about any flame wars!).  I may have been less than clear.

In the case of the 30 hours per week Benefits Manager, she got paid a salary that was consistent with market data for a Benefits Manager, adjusted to 30/37.5 hours per week (we were on a 37.5 hour standard work week; for nonexempts we paid straight time to 40, time and a half over 40), and the salary (never varied) was over the $455 per week rule.  If she happened to work 35 hours she got the same salary as the week she worked 25 hours; but, in any case, she was paid the same salary week in and week out.  The key here is that she was being treated as a salaried, exempt employee (no tracking of hours, pay check never varied).

In the other case, as I said, she was in a job that could be classified as exempt, but, was treated (tracking hours, paid for hours worked) and paid, as nonexempt.  One time I had the misfortune of looking at her pay history which bounced like a ping pong ball between 15 and 30 something hours.  She was a computer professional eligible for the computer professional exemption; she did lots of work from home, and often at strange hours (she would put the kids to bed then work from 9 till midnight, when she would do her e-mails with project updates).

One question:  What threshold are you using to define "overtime?"  Over scheduled hours, or over standard hours, or over 40?  In the employer above, nonexempts were considered full time over 35 hours a week (benefits eligibility), most were scheduled 37.5 hours a week, and paid straight time to 40 then time and a half over 40.  Often times I found myself explaining that while they were working hours over what they were normally scheduled, we didn't pay "premium time" until they worked 40 hours in the week?

 Ned


#1

Part-time Exempt Employees   
Posted: 08/20/2009 08:49am  
  

Federal law only requires OT pay when you work more than 40 hours in a week, if nonexempt. I would treat your part-time exempt employees the same as you do full-time exempt employees, in terms of overtime pay, if you pay it to exempt. Some companies don't.


Private10775

   
Part-time Exempt Employees   
Posted: 08/20/2009 09:19am  
  

Ed,

Just think how boring things would be if everyone had the same viewpoints!  Like our friend Jim Brennan likes to say, we might end up like lemmings driving ourselves into the sea.

As to the question that you asked, my employer does not have anything less than 40 hours for a scheduled workweek.  However, my previous employer had operations in New York City and Chicago where they had shorter workweeks - 35 and 37.5 hours respectively.  But back to my present employer, our exempt policy of paying straight- time pay is a company policy, not an FLSA policy.  So we are free to establish any kind of parameters around it that we feel are appropriate.  Technically, you are free to pay 1.5x premium to your exempt employees however you'd like to as well, but it may be confusing to them thinking (mistakenly) that they are not getting the FLSA premium as required by law.  Thats why I suggested that on principle, anything you decide to give to exempt employees should be at a 1.0x rate instead of a 1.5x rate.  That makes it clearer that it is a company policy, not a FLSA policy.

Paul 


#2

Part-time Exempt Employees   
Posted: 05/06/2010 11:40am  
  

I have a question relative to this discussion.  We have part-time exempt employees that we are currently paying hourly.  We do need to change this, and plan to quickly, but can we pay an exempt part-time employee a salary and have them track their hours for payment of any hours worked over their standard hours?  For example, an employee's standard hours are 24 but they work 30 in one week.  Their salary is $1,000 for the week (24 hours) could we would add $250 for the extra 6 hours and not jeapordize their exempt status?


Private34235

   
Part-time Exempt Employees   
Posted: 05/06/2010 12:09pm   Revised: 05/06/2010 01:00pm  
  

In my opinion, paying these employees more than their regular salary for work beyond their normal schedule does not effect their exempt status, since paying full-time exempt employees overtime pay for work beyond 40 hours does not affect their exempt status. Paying them for work under 24 hours could pose problems, since the DOL defines a salary as a predetermined amount paid each pay period that cannot be reduced because of variations in the quality or quantity of work performed. Keeping track of hours worked does not affect their exempt status, as well.

You can call your regional federal DOL office and state DOL office to make sure of this.

http://www.dol.gov/whd/regs/compliance/fairpay/presentation.ppt#339,13,Salary Basis Test


Private19130

   
Part-time Exempt Employees   
Posted: 05/11/2010 09:10am  
  

I am actually a PT Exempt employee and have been since January 2005. I work 35 hours per week and my salary is 88% of what it would be if I worked 40 hours per week. My colleague is aso PT Exempt working 32 hours per week. We also have 2 employees in our IT department that are PT Exempt. One at 32 hours per week and the other at 30 hours per week. It shouldn't jeopordize the status. The person should have the same responsibilities but just work less hours.


Private18382

   
Part-time Exempt Employees   
Posted: 05/11/2010 11:19am  
  

We have some jobs that are clearly exempt positions, such as Social Worker and Nursing Supervisor.  We try to maintain that if the employee is benefit eligible (scheduled to work 24 hours or more in a week), then they need to be exempt and paid a weekly salary.  A salary for us is based on an hourly rate times scheduled hours. 

We've gotten pushback from some department heads because they have staff who are not working a set schedule.  For example, a Nursing Supervisor who works 28 hours one week and 32 hours the next week, on a rotating basis.    Could we make one employee in a group of Nursing Supervisors non-exempt?  For those who are per diem or scheduled to work less than 24 hours per week, we classify them as non-exempt.   We have to be careful with these to make sure we're meeting the Salary Basis test.

I am interested in the posts about paying exempt employees for the hours they work, provided it is more than the minimum guaranteed salary.  I've seen conflicting information on whether we could pay an exempt employee additional pay for working in a non-exempt capacity in a secondary job.  For example, we might have a Nursing Supervisor that is called in to pick up a RN shift because we had a call out from a staff member.  We have a secondary job set up, and the employee is paid hourly.  I talked with the DOL, and I referenced the "Minimum Guarantee, Plus Extras" and they seemed fine with it.  I've posted on other forums, and I didn't get the same response.  Anyone have a response?

Some of the other posts seem to reference this same provision.  You can pay an exempt for extra hours, as long as they get their minimum guaranteed salary.


Private10790

   
Part-time Exempt Employees   
Posted: 05/11/2010 12:24pm   Revised: 05/11/2010 12:25pm  
  

Your last point makes sense to me, but I'm neither an attorney nor a WHD inspector, and their opinions are the only ones that count.  Makes it tougher, too, when WHD has both dispensed with the practice of issuing practical opinions applied to specific cases and has recently even repudiated some past published opinions.


#3

Part-time Exempt Employees   
Posted: 05/11/2010 12:55pm  
  

I have been a part-time exempt manager for several years.  I am paid based on my normal 24 hour workweek.  So, we took 60% of the full time salary to determine my salary.  My hours and salary are set and do not move.  However, because I am a manager and also try to be flexible - there are times that I work more than the scheduled 24 hours.  I don't get paid for those - just like an exempt manager wouldn't get paid to work over 40.  My boss is careful about taxing my workload too much so I am not consistently working way over what I am paid for.


Private34235

   
Part-time Exempt Employees   
Posted: 05/11/2010 01:00pm   Revised: 05/11/2010 01:11pm  
  

Kara,

Consider this statement in a DOL document on the FLSA:

"Exemptions are typically applied on an individual workweek basis. Employees performing exempt and non-exempt duties in the same workweek are normally not exempt in that workweek."

http://www.dol.gov/elaws/esa/flsa/screen75.asp

See if this DOL presentation helps with your question on the salary basis test. http://www.dol.gov/whd/regs/compliance/fairpay/presentation.ppt#350,24,Additional Compensation

 I'm not sure I follow your question. How is the employee in question working and being paid? According to the presentation, working on a per diem basis or part-time does not necessarily make an employee non-exempt.

Frank


Private22102

   
Part-time Exempt Employees   
Posted: 05/11/2010 02:18pm  
  

We have a salaried-exempt part-time status.   The FTE factor is adjusted to reflect the work schedule (e.g. 0.5 = 20 hours per week).  The factor adjusts the salary/salary range and pay-related benefit accruals (e.g. paid time off).


Private26062

   
Part-time Exempt Employees   
Posted: 05/13/2010 08:23am  
  

Kara,

I was in a healthcare setting and when our exempt nurses (primarily our DON) worked a shift on the floor we did compensate them a flat dollar amount.  We chose to base this on an average rate for the position they were filling x 8 hours.  We did not have them track their actual hours to avoid the conflict with the non exempt position.  Essentially as DON or nursing supervisor it is their job to make sure shifts are filled so if one could not be filled, they may have been required to work it as part of their exempt position even if the duties performed during that time could have been considered non exempt duties.  We considered it additional compensation to them for performing their own job.

As for one nursing supervisor paid as a non exempt while the others are exempt, I believe you can treat them individually per their own hiring arrangements.  We assigned the FLSA classification per the position duties.  If a position qualified for exempt status and we wished to allow a part time person in the position (or pool / per diem) we could pay them as non exempt by paying them on an hourly basis.  They would have to track their hours while the exempts would not.   Of course it would never work the other way around, to pay someone as exempt if the position were classified non exempt.  As long as the employee is aware of their overtime pay classification and responsibilities, you should be able to pay part timers salaried or hourly.  And if they are truly part time, they would never work over 40 hours per week which would make the issue moot.   If you have 8/80 overtime rules, you probably would not want to pay a part timer as an hourly person if they could be paid as exempt unless you want to benefit the employee. 

So first make sure the position can actually be exempt, then pay per the DOL rules and you should be fine.   For example, I hope your social workers are masters level and actually functioning in that capacity, ours were deemed to be non exempt since they were bachelors level and considered only doing administrative work.


#4

Part-time Exempt Employees   
Posted: 05/13/2010 09:54am  
  

I don't understand why anyone would bother having PT exempt employees.  It makes the most sense to me to pay PT employees on an hourly basis and pay them for the hours they work.  Unless you treat exempt and nonexempt employees differently when it comes to non-cash compensation, what's the benefit to keeping them classified as exempt?


Private10790

   
Part-time Exempt Employees   
Posted: 05/13/2010 10:22am   Revised: 05/13/2010 10:23am  
  

Lots of benefits to having PT'ers exempt.  Just to mention the first few that come to mind:

  1. no need to track or report actual hours worked
  2. fixed (thus easier) payroll budgeting
  3. higher internal "status" in most enterprises
  4. frequently entitled to different/superior policies and practices
  5. often receive preferential benefits packages or perquisites

#4

Part-time Exempt Employees   
Posted: 05/13/2010 10:49am  
  

In response to Jim's comment, I acknowledged in my first posting that, unless your company provides different benefits (non-cash) to PT exempt employees than it does to PT nonexempt employees, what are the benefits of classifying the employee as exempt?  You still end up tracking the hours because someone will inevitably argue that they are working more hours than the "agreed" amount.  I've seen that happen too many times.  In one case, we ended up classifying our Corporate HR Manager as nonexempt because there was constant conflict regarding how much time she was working (and she wanted to rewarded for all of her effort).  Regarding Payroll budgeting - it isn't really any easier if you are accustomed to using historical data for budgeting anyway.  I don't know how common it is, but in my experience, very few companies give different levels of non-cash benefits based on FLSA classification.  I have seen different bonus levels awarded based on pay grade, but not based on FLSA status.  Companies who place "status" on FLSA classification are overlooking the more important aspect of one's job - what they really do.  Every job could be classified as nonexempt if you chose to pay on an hourly basis.  With that in mind, what does the FLSA exemption have to do with internal status?  Perhaps some companies are misleading their employees on what the FLSA is all about.....


Private10790

   
Part-time Exempt Employees   
Posted: 05/13/2010 11:18am  
   (1 rating)

Perhaps I misunderstood when you asked "why anyone would bother having PT exempt employees?"  There are a number of reasons someone might do that.  Some are good, some are bad; some are valid, some are not; some are clear, some are confused, etc.  If none of the reasons appeal to you, that doesn't change the fact that they exist and are attractive to others.... which I thought was the question.  No sense in arguing with personal opinions, because everyone has them.  Everyone is entitled to their own opinion regardless of your opinion or my opinion.  Each person is unique, just like everyone else.

Innocent


#1

Part-time Exempt Employees   
Posted: 05/13/2010 11:40am  
  

I would have to agree with Anon.# 4. Frequently, the advantages of making a part time person exempt are not that great and, if people stopped to consider why they are doing it, they would come to the same conculsion you did. The decision merits are a closer look than many of us tend to give it, and you are to be given credit for realizing this.


Private26062

   
Part-time Exempt Employees   
Posted: 05/14/2010 08:11am  
  

In my experience, people still prefer not to have to punch a clock in order to be paid and do view it as a higher status to be exempt.  It is somehow viewed as deeming or bothersome to have to track their hours worked.  They want to be trusted to work the hours they have agreed to and if they work more one week, they might work less the next.  So being exempt is appealing from that standpoint.  Now certainly a company could have policies in place which promote or reinforce that way of thinking and perhaps they would be better served to reinforce what it really means to be non exempt.   When one is exempt due to the loss of that potential overtime, enhanced benefits are often offered.  We offered lower health insurance premiums to our exempts or possibly a higher accrual rate for PTO.  Those benefits could be negotiated with the part time exempt position along with salary.   I agree that  FLSA classification alone should not determine job value and therefore status in the organization.  However  the mind set at least in the non profit world I knew was that an exempt person, who has no chance at overtime pay, will work long hours without additional compensation. Therefore a better benefit package was sometimes the only incentive. 


#4

Part-time Exempt Employees   
Posted: 05/14/2010 08:35am  
  

Very few companies these days expect white-collar non exempt employees to punch a clock, or even track their time on an hour-by-hour basis.  All they ask from the employee is that they make an entry into some timekeeping system that shows how many hours they worked that day.  Often times, they allow the employee to enter those hours at the end of the week - so it's not even a daily activity.  Many exempt employees do the same so that they can "bill" another department, company or client.  What is the likelihood that a person who works PT (whether exempt or not) will be expected to work long hours?  If that were the case, why would you classify them as PT in the first place?

Companies that provide different levels of benefits to employees based on FLSA classification are communicating the message that FLSA classification is a status symbol.  I think that is unfortunate.  I think it is worth remembering that any job, regardless of duties, authority, responsibilities, etc., can be nonexempt if you choose to pay the person on an hourly basis.  Given that reality, why is it that some companies perpetuate the theory that FLSA classification is a status symbol, when the one thing that clearly differentiates the two is the basis on which someone is paid, and not the work (or level of work) that the person does?


Private34235

   
Part-time Exempt Employees   
Posted: 05/14/2010 08:39am  
  

Solid and on-point comments, Anon. #4. I agree with you 100%.


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