Fulltime to parttime exempt - salary change...
Pricehcs
128 Posts
[font size="1" color="#FF0000"]LAST EDITED ON 05-18-04 AT 11:24AM (CST)[/font][br][br][font size="1" color="#FF0000"]LAST EDITED ON 05-18-04 AT 09:25 AM (CST)[/font]
I am struggling a bit with the considerations of salary changes for some of our employees considering going to part time. We are a consulting firm that typically puts in more than 40 hours a week on average. Our consultants are exempt employees and are paid no overtime. When we create a part time position for a consultant, they remain an exempt employee as long as they work over 30 hours a week. We have a documented policy on this (If over 30 or under 30, then ... We use rolling monthly average to determine this.) If their schedule goes below 30 hours, they are an hourly employee with no benefits and are paid for each hour worked. This is done with the understanding that they will not be exceeding (or generally coming close to) 30 hours a week.
My struggle is this. Many of these consultants are averaging up to 50 hours a week. They want to back their schedule down to 32 hours a week in their Part Time Work Arrangement. Conventional wisdom tells you that they should earn 80% of their salary, right? In reality, their work hours and productivity are dropping to about 66% based on their long term weekly work averages (well documented, as we invoice off our timesheets). Here is the question. Can we make a case to lower their salary to 66% of its current amount, or are we forced to go off the 40 hour work week, regardless of actual hours worked, and adjust their salary to 80% of its current amount? Our policy is silent on any specific personal compensation expectations or equations for such a transition, so I will defer to law and precedent. Opinions please!
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
I am struggling a bit with the considerations of salary changes for some of our employees considering going to part time. We are a consulting firm that typically puts in more than 40 hours a week on average. Our consultants are exempt employees and are paid no overtime. When we create a part time position for a consultant, they remain an exempt employee as long as they work over 30 hours a week. We have a documented policy on this (If over 30 or under 30, then ... We use rolling monthly average to determine this.) If their schedule goes below 30 hours, they are an hourly employee with no benefits and are paid for each hour worked. This is done with the understanding that they will not be exceeding (or generally coming close to) 30 hours a week.
My struggle is this. Many of these consultants are averaging up to 50 hours a week. They want to back their schedule down to 32 hours a week in their Part Time Work Arrangement. Conventional wisdom tells you that they should earn 80% of their salary, right? In reality, their work hours and productivity are dropping to about 66% based on their long term weekly work averages (well documented, as we invoice off our timesheets). Here is the question. Can we make a case to lower their salary to 66% of its current amount, or are we forced to go off the 40 hour work week, regardless of actual hours worked, and adjust their salary to 80% of its current amount? Our policy is silent on any specific personal compensation expectations or equations for such a transition, so I will defer to law and precedent. Opinions please!
#1 thing a consultant shouldn't say: "I could tell you the answer right now, but we're committed to a three month project..." #-o
Comments
We are in the process of re-classifying all of our part-time exempt employees to part-time non-exempt so they are only paid for the hours they work. We base their hourly rate on their exempt salary for a 40 hour week, and didn't take into account the fact that some exempt employees work much more than 40 hours. The change isn't going over well with some of the affected employees, so reducing their wages in addition would really send them over the edge.
While I think you COULD reduce their salaries to 66%, I wouldn't recommend it.
What will you do if they start averaging a 40 hour billable week and you are paying them with an expectation of 32 billable hours? It is the same issue you are facing with full-time people. If they are not getting the job done in 50 hours, you have an issue. If they are getting the job done in 20 hours, you have an issue. In each case, it may the difference between a superstar and a poor performer, but you were paying them the same dollars.
Am I making sense? I think this is more of a performance issue with setting the bar for the work you expect at a certain level. If people get the work done they get paid. If they don't get the work done, they get disciplined and eventually do not get paid because they are terminated.