37.5 HRS. TO 40?

pattyo

Our company pays an annualized salary to nonexempt employees for a 37.5 hr. work week. They are paid additional hrly rate for hours worked to 40 hrs. We want to change our policy so salary is for a work week of no less than 37.5 hours but not over 40. After 40, of course, they'll get time and 1/2. Do you see any potential problems? Any suggestions on the best way to communicate this new policy to the employees?

SMace

So they are going to work an extra 2.5 hours for free now. I suggest asking your boss to tell them. YOu better have some rock solid business reasons, like losing accounts or stemming other layoffs. This will go over like a f*rt in church. What kind of paycut will the exempt ee's take? Good luck. Bad idea meethinks.

pattyo

They won't be required to work 40 hours. If they exceed the 37.5 hours they do so on their own. We are trying to cut down the overtime expenses and discourage people from dragging out their day to make extra money. All overtime beyond 40 hours must be approved. Some employees are getting to 40 hours just by coming in 10 min. early, shorter lunches, leaving a few minutes later each day. Still sound bad?

SMace

Less bad, maybe.

Do any of the jobs really need 40 hours? If so still bad.

They are going to argue that point even if you don't think so.

Also some will be waiting by the door for quitting time even if they have some work left to do. "I'm not working for free!"

Have you exhausted every avenue of dealing with the situation from a disciplinary standpoint? Start writing them up for coming in early. Also if they stay late without authorization, write them up. You still have to pay them, but you can discipline and terminate if necessary.

I would try to exhaust every avenue before screwing with their pay. That is something they will never foget, especially if exempts are not taking a hit also.

Communicate any changes in your discipline policy before you start writing ee's up.

Cheryl S SPHR

We are a bank. A while back we went from a 37.5 hour work-week to 40 hours. Many were already working 40 before the change, but we did not pay extra for the hours between 37.5 and 40. We stressed the importance of doing as much as we could with our existing resources. For those who already worked 40 hour weeks, it was a positive; for those who left when they hit 37.5, they viewed it as a negative.

My advice -- lots of positive spin and PR! Good luck.....

marc

If they are non-exempt, you must pay them for each hour worked and time and a half for any hours over 40. If I were in your shoes, I would base the hourly rate on a 40 hour week. Yes, you may have some griping for a while but if it is a business necessity, go for it. You might get some turnover from this action so be ready for it. And just for fun, analyze the cost of turnover compared to the dollars you are trying to save and see if it is worth the risk.

As to communicating, I would emphasize the need for cost control to stay competitive, keep the bank healthy (profitable) which will result in job security and perhaps, performance bonuses and raises.

pattyo

Thanks everyone. I think we're going to by-pass this option. We've already cut OT down considerably so we'll look at some other possible overhead savings.

Hatchetman

[font size="1" color="#FF0000"]LAST EDITED ON 04-02-04 AT 03:36PM (CST)[/font][br][br]If you are paying them a fixed salary for the week whether it is 37.5 hours or 40 hours, then take a look at the FLSA regulations in the Code of Federal Regulations CFR, volume 29, particularly sections 778.113,.114,.306, and .323.

Depending on how you handle the salary and the varying hours of work, you may or may not be permitted under FLSA to dock the salary for absences during the week. Remember as non-exempts, section 541.118 of the FLSA regulations is not applicable to them.

Remember, your state wage and hour law may or may not permit what FLSA permits in this regard. And in any case, you still have to make sure the minimum wage requirements are met when they work more hours as well as either half time or time and a half for the FLSA overtime.