Part-time AND Exempt?

ReneePHR

We have an employee that is categorized as professional exempt. However, she is part-time. I was just reading an article from HR Hero that stated that exempt employees cannot be paid hourly, but must be paid salaried. If this is the case, is it possible to have a part-time, exempt employee? If so, I assume we would need to determine a salary based on her normal number of hours worked. What if her normal hours are 30, but for a few months she works in excess of 40? Has anyone else ever had this situation?

Gillian

Yes, it is possible to be exempt and part time. There is a fairness issue when a partime employee is consistently working more than the specified number of hours. When this happens here we, at some point, ask the department head if the job has expanded to the point that the % of the job, and the salary, should be changed.

Terri

Would that also apply to full time exempts? We have some employees that never see a 40 hour week.

Gillian

Maybe what you have are part time employees in full time jobs. The idea of exempt is that people are paid to do their job and most of us have jobs that are based on the traditional 40 hour week. We know that a lot exempt employees work over 40 hours and there should be no concern when they occasionally work under 40 hours. When exempts are consistently working under 40 hours then a legitimate question is - are they really part time and should their salary reflect that.

pmaher

I CAN'T TAKE IT ANYMORE! I've researched this over and over again. I finally convinced management that we need to pay exempts a salary and not by the hour. That was hard enough. Then we have a consultant from a government agency who was installing a new timecard system. She said it was okay to have hourly exempts. My stomach turned over several times. Sure enough, the code is in the system. This system gets audited by the DCAA so I was thinking, "well, this must be okay" but I guess it isn't. We have several employees who are exempt but work part-time. Why isn't there a straight answer under the FLSA regs for this event??????

I JUST GIVE UP! Thanks for listening to my tirade.

Rockie

We have two exempt people. One works four days a week (32 hours week) and her salary was adjusted by a percentage when she went to four days. This is not a big problem as she is not called on to work the extra day.

The biggest problem is our "controller" and I use that term loosely. She is supposed to work 36 hours a week, but here is her "normal" schedule. She drags into the office about 9AM - she leaves around 12 to have a "run" every day and gets back into the office 1:30 or 2PM. She then leaves at 4 or 4:30 at least three days a week to play tennis with her "ladies who lunch" group. She is constantly shoving work onto her limited staff to do what she doesn't want to be bothered with. The staff has finally caught on and refers to her as "that bitch who doesn't want to work." In between doing a little work, she is on the phone with tennis buddies making plans or making travel plans. She takes several weeks vacation a year.

She also had the audacity to tell her supervisor when she worked over 36 hours a week, she expected comp time for it. I told her supervisor (CFO) that comp time is illegal and also brought to his attention her usual schedule in the office. This person has been here a long time and the supervisor apparently doesn't have enough of a backbone to address it with her.

I am sure this person will crash and burn eventually, but she is a thorn in the side of employee morale when people see her running through the parking lot in her little short shorts two hours a day while they are in the office working.

Pork

IF the position is truly EXEMPT, then the company decides what the position and the individual is worth to the company, and what the individual is willing to accept to accomplish the necessary work. Every week pay that amount and quit keeping any time sheet. Work is accomplished and compensation is received. the company should not worry with how much time is spent. Now, if the company is not getting the work done but paying the salary, because the employee is not putting enought time on the project, the company may want to change the program!

Don't let HR become the policeman here; this is a performance and compensation issue for the person/s responsible for making sure sufficient quality work is performed by the professional part-time employee for the compensation ageed upon by both parties. Just because the word part-time is somehow connected to this professional position does not related to the professional nature of the position and an EXEMPT STATUS OF THE POSITION! Pork

HR inWA

I have an add-on question to this topic.
I have a senior manager who is reducing her schedule to 4 days per week. We are reducing her salary by a certain percentage and she has agreed to it (in fact, she is the one who is requesting this and is happy that we're agreeable). Am I wading into troubled waters at all with this? I worry that it starts to look like her compensation is based on the hours that she works...

Rockie

>I have an add-on question to this topic.
>I have a senior manager who is reducing her schedule to 4 days per
>week. We are reducing her salary by a certain percentage and she has
>agreed to it (in fact, she is the one who is requesting this and is
>happy that we're agreeable). Am I wading into troubled waters at all
>with this? I worry that it starts to look like her compensation is
>based on the hours that she works...

No, this is perfectly acceptable. You should reduce her annual salary by a percentage, not on a "per hour" rate. Keep in mind that oftentimes, "exempt" employees who work a reduced schedule may occasionally have to work extra time to meet the parameters of their job. They are not entitled to extra compensation, just as a "full time" exempt individual is not entitled to overtime if they work in excess of 40 hours per week. This is the biggest problem with these type individuals - if they have to occasionally work a five day week, they feel, somehow, they should be compensated for it. Be careful not to fall into this trap.

Leslie

I had a full time exempt employee (5 days) who went down to 4 days. Her salary was broken out to 5 days and reduced by one day per week. Would I have been better served to do a percentage or are the days okay?

Rockie

As long as you don't quote the salary as "____ per hour", you are safe. I'm not quite sure when you say, you broke it down by "days". If the salary goes from five days to four days, I'd just reduce it by one-fifth and state it as ____dollars per year, payable bi weekly at $______" (if this is how you are paid).

Hope this answered your question.

Don D

But, stay away from 'years' and this concept of paying an 'annual' salary. State it in terms of per pay period, period. To be clear in offer letters I will only say, ........paid bi-weekly, which, if annualized, would be -----.

HR inWA

Another question relating to the manager who is dropping from 5 days per week to 4 days per week...
When we put the hours in to payroll, should this manager be paid 40 hours per week - or 32?
The compensation will be the same regardless, but this could impact L&I (industrial insurance in Washington), and potentially other areas such as leave accrual.
Any advice?

Pork

HRinWA: It would appear to me that as long as the position and the work performed is truly exempt the offer of value ($$$) to get the work done in 4 days rather than 5 is a real plus for the company. If the same amount of work previously accomplished in 5 days is now going to be accomplished in 4 days, I could possible build a case for improper prior classification as exempt. Why should the company pay less for the same volumn and quality of work performed now in 4 days that used to take 5 days? Verify that the production and quality is going to less, if so put your concerns to "bed". Pork

Petard

For the most part, these comments appear to be on safe ground. Just a cautionary note, though, to Gillian and other dear contributors to Forum in the great state of California:

“ . . . [T]he Division of Labor Standards Enforcement has determined that it is impermissible for an employer to reduce an exempt employee’s salary because of a reduction in the employee’s hours. A reduction in pay is lawful, however, if it is based on something other than a reduction in hours worked, such as reduced employer profitability, poor performance, or changed economic conditions.” (This from a San Francisco law firm.)

The notice goes on to suggest that reductions in pay and deductions from pay geared toward a part-time schedule are problematic for exempt employees because they are supposed to receive their salaries regardless of the quality or quantity of their work. In other words, DLSE frowns upon having exempt employees in part-time capacities and possibly even prohibits it.

This opinion may be subject to the usual game of semantics, and I don’t know how it works in practice. If you had two CA employees in exempt roles (and everything else about them is the same), it seems that it would be OK to pay one a lower salary than the other if the first works 32 hours a week while the second works 40 hours per week. Nonetheless, it may not be OK to reduce the pay of the 40-hour employee if his or her schedule is reduced to 32 hours a week. Go figure.

Hatchetman and others in CA may want to chime in, especially if they know for sure how this works out there. I’m in Texas, but our company has some CA employees, so we try to pay attention to CA rules occasionally.

San Francisco

Petard, I would also be interested in what other California employers have to say regarding part-time exempt status. I have never heard of it. As you pointed out, the amount of compensation cannot be subject to reduction because of variations in the quality or quanity of the work performed. In my position, there are times when I probably do not "work" a full 40 hour week, but there are also those weeks when I am working 50-60 hours. However, since my purpose is to support our stores, I am available from at least 8AM to 5PM. We also alternate carrying a pager 24/7 so that our stores will always have help when needed.

Elizabeth

Petard

I suspect that the DLSE’s theory is along the lines that true exempt work is “blind” to the clock. It doesn’t matter whether it takes a few hours or many hours to get the job done. That’s why the rule exists that (with a couple of exceptions) an exempt employee is entitled to his or her salary for a full week if he or she works at least one hour in that week.

In any case, presumably as a way to prevent employers from playing fast and loose with the regs, DLSE forwards the interpretation that salaried, exempt work is by definition full-time work. Someone who works part-time must be considered to be hourly—or at least nonexempt. That would explain why you can’t reduce an exempt employee’s pay solely because his or her schedule is reduced. I have no specific citation or precedent to illustrate this; it just seems to be DLSE’s logic.

I don’t know Forum’s rules for giving out vendors’ or law firms’ names, but if you e-mail me, San Francisco Elizabeth, I’ll give you the name of the law firm that sent us information on this topic.

WOCO Frank

To meet the DLSE's standard, I believe you just need to show that there is an appropriate reduction in actual work performed - not expressed in hours worked, but in the actual work product. IOW, if there are specific work duties that are no longer hers because she's only working 4 days, then you can renegotiate her salary.