Semi-retired employee wants more $$ for special projects

Moria

We have an employee who is is 62 and taking early semi-retirement.
She had decided that she wanted to continue working on a part-
time "special projects" status for us. Since she is such a valuable
employee and the fact that I have several departments vying for her
every hour we had agreed to accomodate her. Well, as with all good
things this has come to an end. She now tells us that she has mis-
calculated her gross amount she can earn this year and from now on
for every $2 we pay her she has to pay $1 in tax. So her resolution
to this problem is that we pay her instead of the $10.00 per hour,
we pay her $15.00. Hey if I could I would. First we are a not-for-profit
with that said the other reason is equity for other employees. The other
part is that after the first of the year she has agreed to come back and
do a 4 month stint for an employee that is going on sabbatical. Does she
go back to $10.00. I wouldn't, if I was valued higher in November and
December of 2002, I sure would not be less valued in 2003.

I have a supervisor that is pretty insistent upon paying her the $15.00,
our CFO is vasilating. What should I do?

Help, this needs to be resolved this week. Thanks.

Theresa Gegen TX

I think that all you can do is sit down with the management and identify the issues that raising her pay will raise for the organization. Make sure that the decision makers understand that it will cause budgetary issues and that other employees will probably want raises too, which will cause even more bugetary issues. One way to get the monkey off of your back and on to the supervisor's back who is pushing for the raise, is to quantify the amount of money it will cost, and give concrete examples of things that the organization will not have be able to do because of the cost (for example this extra 5$ per hour over X time will equal __________ in services, or ________ in equipment; or _____ in mailing for donations). As the supervisor what he or she is willing to give up to make up for the extra pay).

Really, it boils down to a decision about just how valuable this employee is. She may continue working, even if you don't give her the large raise she is requesting. However, she may refuse future projects if she does not get the raise. My inclination would be to not give her the raise and take the chance that she quits over it, but I don't know how valuable her skills are. In this economy, however, there are lots of very qualified people looking for jobs and the business needs to insure that everyone has a sucession plan -- in otherwords that the skills are transferrable. However, it may be that you are still getting a bargain at 15$ per hour. That's something only you can determine.


Good Luck!

Rockie

I think what this lady is talking about is the limitations on social security earnings. Since she will probably be drawing her social security at 62, there is an annual limit as to what she can earn a year (can't remember right off the bat what it currently is). If she makes over this amount, for every $2 over this amount, she has to pay back $1. At least this is the way it used to be. When she reaches the normal social security retirement age, the annual earnings is unlimited. If this is the case, increasing her salary will make it worse for her, not better. Not sure if this is indeed what she is referring to rather than "tax" or not.