Extra compensation for exempt employees

MS HR

To all you HR gurus out there:

Is there a way I can reward my exempt employees once or twice a year for all the extra hours they put in? I'm thinking maybe a "bonus" or something?
I want to be sure not to risk my exemption status, though.
Any ideas would be most appreciated.

Rockie

Giving a bonus to exempt people will not jeopardize exempt status. I am not sure what kind of money you are talking about, but you may want to consider a nice gift certificate. I ran across a great program called giftcertificates.com last Christmas when we were in the usual dilemma about where to purchase our annual gift certficates. This company lets you purchase a certificate for a certain amount and the employee can redeem it at any one of hundreds of stores, either on line or call in directly. We had nothing but compliments from this program. If you give, say $100, they don't have to use the entire $100 on one certificate. They can break it down. There is a variety of places to redeem this from restaurants to clothing to home stores.

Just a thought. It worked for us!

MS HR

Thanks, Rockie.
It's something for us to consider.
My thinking, though, is that are expecting cash.
I'm looking at about $500 each twice a year, or thereabouts.
I appreciate the input.

Hatchetman

[font size="1" color="#FF0000"]LAST EDITED ON 03-13-03 AT 06:47PM (CST)[/font][p]You may pay a bonus to exempt emplyees for extra hours worked without jeopardizing their status as provided for in FLSA regulations, 29CFR541.118(b).

The US Department of Labor has also taken the postion that you may pay overitme to exempt employees in any manner, including comp hourly or even "cash" per hour, as long as you don't inappropriately dock their salary.

The specific wording from 541.118(b) is:

"Minimum guarantee plus extras. It should be noted that the
salary may consist of a predetermined amount constituting all or part of
the employee's compensation. In other words, additional compensation
besides the salary is not inconsistent with the salary basis of payment.
The requirement will be met, for example, by a branch manager who
receives a salary of $155 or more a week and in addition, a commission
of 1 percent of the branch sales. The requirement will also be met by a
branch manager who receives a percentage of the sales or profits of the
branch, if the employment arrangement also includes a guarantee of at
least the minimum weekly salary (or the equivalent for a monthly or
other period) required by the regulations. Another type of situation in
which the requirement will be met is that of an employee paid on a daily
or shift basis, if the employment arrangement includes a provision that
the employee will receive not less than the amount specified in the
regulations in any week in which the employee performs any work. Such
arrangements are subject to the exceptions in paragraph (a) of this
section. The test of payment on a salary basis will not be met, however,
if the salary is divided into two parts for the purpose of circumventing
the requirement of payment "on a salary basis." For example, a salary
of $200 in each week in which any work is performed, and an additional
$50 which is made subject to deductions which, are not permitted under
paragraph (a) of this section."

Subsection (a) is the provision that identifies both permissible and impermissible docking reasons.

MS HR

Hatchetman and others:
Thank you many times over.
I hope I can return the favor some time.

Don D

MS HR: The short answer is, of course, YES, you may. I figured some would tell you to check your state statutes. But, being in your same state, I can assure you there's no conflict there either. We pay quarterly bonuses to shift supervisors for certain hours they put in way above and beyond. And of course we don't track hours for the purpose of docking them. Cheers to your company for considering this. Hope you can continue to afford it. One caution is that you devise a way of having them understand it's not a continual company obligation or expectation. It may go away just as soon as it arrived.

MS HR

Thanks Don.

Pork

MS HR: Oh how wonderful it is not to be encumbered and tied down to a bunch of rules and regulations on compensation. Our state is smart to stay very close to the Federal Law/s. Our company gives production bonuses to the operation folks who control the production of many / many baby pigs. Those of us not in production have been able to be recognized for our "being here" and "supporting" role. The owners ask for a priority impact list and a recommendation by management and senior leaders on who should get what, and how much! The awards this year went from $0.00 to $4000.00. Everyone was considered including the production bunch, who are already on a production bus program! It sure makes for a nice Christmas! Go for it, but remember to include everyone. Pork

Peyton Irby MS

i have been out of the office for ten days. hatchetman's response is right on the money. extra compensation for an exempt employee does not invalidate the exempt status as long as there are not other factors invalidating the status.