Paying Exempt Sales 4 day per week

Craig B

My company has just aquired another company and I am concerned how they pay their Sales Profesionals. If the exempt salaried sales profesional is above quota they are allowed to not have to report to work on Fridays. I just discovered that when this happens they were only paying the sales person for 32hrs of work for that work week. I am aware of the permissable deductions for salaried exempt personel. The program was initiated as a Flex schedule so the employee could take care of personal business on Fridays. Please let me know your thoughts? Do you think we would have to give back pay to all of these individuals for the day they were not compensated for?

Thanks
Craig

Hatchetman

Firslty, are these inside or outside sales people? Secondly, are they being paid any salary, or is compensation just based upon commission? Outside salespeople don't have to be salaried to be exempt. If they are customarily and regularly engaged in their sales duties away from their employer's place of business that would be sufficient to make them exempt (assuming that no more thaqn 20% of their time is spent in non-exempt duties). Thus if they meet the exempt status on this basis, they would appear to fall under 29CFR541.118 as "white collar" employees.

Are the employees are being told not to report to work, or are they being given the option, "you can have Friday off, but if you want it, you ahve to use your own time"? If they are having their compensation docked for the absent Friday which is imposed by the employer, that would seem to be in violation of the 541.118, since they would be entitled to the pay if they were ready, willing and able to work on that Friday but didn't because the employer forced them to be absent.

Inside salespeople may also be exempt, but they must have more than half of their compensation come from commissions and they must receive at least one and a half times the minimum wage. Thus, they do not fall under 541.118. You should probably consult with your employment law legal advisor for the propriety of docking the earnings for the absent Friday if it is not voluntarily taken off.

Pork

CraigB: You may have stumbled into a "hornet's nest". You may need to research how your company got to where the company is with this arrangement. It sounds doubtful to me; we would be happy to pay the exempt's "agreed to salary" for making the sales quota in 4 days verses 7 days. I would be concerned that the individual is not pursuing additional customers on the remaining 3 days of the week in order to excel beyond the peer group! A Friday Off for personal business in a salesman's life is rare, but it could be most end up representing the company for sales on Sat & Sun! I have a bother-in-law who receives calls for products 24 hours a day and he'll respond to the emergency needs of the customer; my sister tells me he has received calls during life's most pleasurable times and the "jerk" responded to the call because he is owned by the customer. Pay the "agreed to salary" and let the salesman worry about making the quota regarless of the number of days! Be happy that you have salesmen like my brother-in-law, because he actually puts money in your hands so you can take care of your family! Pork