Non-exempt salaried vs. hourly
Christine M
66 Posts
I have recently started working in a non-union manufacturing environment. Positions are divided into three classifications, Salaried Exempt, Salaried Non-Exempt, and Hourly.
Both Salaried Non-Exempt and Hourly workers receive time and one-half for hours worked over 40. Comp for Salaried Non-exempt workers is expressed in ranges and employees merit increases are based on job performance. Comp for Hourly workers is expressed in exact units and increases vary upon length of time in the job as long as employees meet minimum specifications.
An initial review of these categories and the positions within them indicates some discrepancies so I am trying to determine consistent criteria for how we decide to categorize positions. I have polled my HR network and found that anyone I know with a similar structure is based around the presence of a union with all union workers being hourly and the remainder being exempt and salaried non-exempt.
My thinking is that the Hourly classification is appropriately used for positions where performance is easily measured, i.e. production and quality, and where there is little room for variance of performance around the standard, i.e. a worker meeting the minimum produces 400 parts/hour with a 2% rejection rate and an outstanding worker produces 450 parts/hour with a 1.5% rejection rate. The salaried non-exempt classification is used when the job is less easily measured, i.e., administrative assistants, and where the variance between accepted norms and outstanding performance is much wider.
As a note, the benefit package for Salaried non-exempt matches the exempt workers and hourly workers have another.
Is there anyone using a similar situation who has suggestions? I am loathe to go in and change the entire comp system as a new employee, but I do want to apply the existing one fairly and consistently.
Thank you.
Both Salaried Non-Exempt and Hourly workers receive time and one-half for hours worked over 40. Comp for Salaried Non-exempt workers is expressed in ranges and employees merit increases are based on job performance. Comp for Hourly workers is expressed in exact units and increases vary upon length of time in the job as long as employees meet minimum specifications.
An initial review of these categories and the positions within them indicates some discrepancies so I am trying to determine consistent criteria for how we decide to categorize positions. I have polled my HR network and found that anyone I know with a similar structure is based around the presence of a union with all union workers being hourly and the remainder being exempt and salaried non-exempt.
My thinking is that the Hourly classification is appropriately used for positions where performance is easily measured, i.e. production and quality, and where there is little room for variance of performance around the standard, i.e. a worker meeting the minimum produces 400 parts/hour with a 2% rejection rate and an outstanding worker produces 450 parts/hour with a 1.5% rejection rate. The salaried non-exempt classification is used when the job is less easily measured, i.e., administrative assistants, and where the variance between accepted norms and outstanding performance is much wider.
As a note, the benefit package for Salaried non-exempt matches the exempt workers and hourly workers have another.
Is there anyone using a similar situation who has suggestions? I am loathe to go in and change the entire comp system as a new employee, but I do want to apply the existing one fairly and consistently.
Thank you.
Comments
I have many manufactuiring clients who use the exact system that you are describing. Salaried non-exempt is usually used for the people working in others areas of the company besides manufacturing (Sometimes called "the office") There is prestige to being promoted off the clock and not having to account for every minute of your time.
If you have discrepencies in the system it means that either you have exteme variances in performances within each job category (which is not a problem as long as everyone falls within the salary range designated for the job) or you have people who are misclassified in their job range (which can be corrected by re-classifying them) or people who are administering the system that are not following the guidelines (which is a big problem and can lead to lawsuits). You may want to have a compensation analyst look at your system and tell you whether you have the jobs classified where they should be, what administration guidelines you should use, whether you are competitive in the marketplace, etc. Having an outside expert will help you determine what you need to do and will also keep HR from being the bad guy that makes everybody change what they are doing. I'll be glad to refer you to a good one if you like. Call me at 615-371-8200 if you want a referral or have any questions about my answer.
Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]
I am trying to figure out the difference between a part time hourly employee and a half time hourly employee. Both are paid monthly. Is either one eligible for company benefits? Can you help?