Vacation pay & second rate

We have an employee who is scheduled every day to work 6 hours in one job and 2 hours in another. The rate of pay for job 2 is $4.20 an hour higher than job 1.

Recently, he went on vacation for a week and we split his vacation hours the same way as his work hours. We are a non-profit subsidiary of a larger company and the "parent" company says the payroll system will only pay vacation on the first rate. So, our employee lost $42 gross pay for this week. He was understandably pretty upset and says he may not want to work job 2 if that is the way it is going to be.

We then tried to change his pay to one rate, which equaled what he is currently making, and separately "charge" the appropriate amounts to each department in the accounting system as we currently do with several other employees. The other employees, however, only work one job.
Our parent company would not let us do this either because there are two separate job descriptions. They are not job descriptions that we would want to combine.

Does anyone have an opinion on this? I feel like we are docking this person every time he takes vacation or a holiday. And, we certainly do not want him to quit job 2 as he is a very valuable employee and it is a very hard job to fill.


Comments

  • 11 Comments sorted by Votes Date Added
  • Could you issue 2 separate payroll checks one for job 1 and the other for job 2.

    Example:
    Job 1 works 30hrs at 10.00/hr check for $300.00 minus taxes, etc.

    Job 2 works 10 hrs at $14.20/hr check for $142.00 minus taxes, etc.

    Vacation would be handled the same that way you are dividing the job duties and the ee would be paid the same amount as he would if he worked.


  • Good question. I will have to check that out. Thanks for the idea.
  • That is a really good idea, but what if there is overtime? In my previous non-profit life, we were very strict about non-exempt employees keeping at 40 hours (went home early on Tuesday, the last day of our pay week, if they were at 40) so it may not come up. But under the above example, the employee could work 35 hours at job 1 and 15 hours at job 2, equalling 10 hours of OT and not get paid for it.

    Would it be possible to issue the 2nd payroll check ONLY when there is a holiday or vacation involved? Of course, another memory I have of non-profitism is that we got most of the fed/state holidays, so that will come up more often than your payroll might prefer.

    Good luck!
  • We have a similar situation in that employees may work in a department other than their primary department. These other departments sometimes pay more or less than the primary department.

    However, our pay policy clearly states than all pay (other than for hours actually worked) will be based on the primary pay rate. Thus, vacation pay, sick pay, jury duty, holiday pay, etc are all paid at the same rate. It really simplifies the pay process. I couldn't imagine having to prorate an employee's pay based on the various departmental rates they might be paid. In our case it balances out, since the employee might work in a department that pays less than his primary rate as well as the department that pays more than his primary rate. It also eliminates any problems associated with overtime.


    A good example of the logic involved is seen when our assistant supervisor has to fill in for the supervisor. When this happens we pay the assistant an extra $1.50 per hour, but do not adjust vacation pay, etc.


  • But this person isn't "filling in". They are "his" jobs that he works every day.
  • Overtime is not based on the position the ee is doing but on how many hours the ee is working.

    It does not matter which job they are doing after 40hrs worked they get OT. The PR dept would have to know which job and how many hrs they worked OT and apply it to that job.

  • I am not going to get into the "overtime issues" because that isn't what you seem to be asking.
    First of all, I hate to say this, but I can't believe what your parent company (that does payroll) is telling you is correct. I don't know what type of payroll system they use, but I would suggest that they contact their provider and pose the question to them. I know of too many situations where you might want 2 different rates on the same check and that what payroll systems are made to do. (sounds like to me it may be more work than the parent company wants to do. Or, they may just not know how to do it and haven't even tried to ask someone.)
    You might want to ask them what type of payroll system they use and then post that here to see if anyone here uses that system and might be able to provide more input. (If this is truly the case and the system can't do it, I would suggest that they look into a new payroll provider... must be a really old system.)
    E Wart
  • They use Kronos. I think its more that they don't want to do anything different than what they are doing. The HR Director is not willing to listen my reasoning and told me to have our Executive Director talk to the CFO who oversees our operations. So, now we are just trying to find some info that we can use to convince them to do this.
  • What a pain. I am so sorry your other area seems so uncooperative. I know Kronos does time clocks, but I didn't realize they had a payroll program/processing area... but sounds reasonable.
    E Wart
  • [font size="1" color="#FF0000"]LAST EDITED ON 06-09-06 AT 12:19PM (CST)[/font][br][br]You asked for an opinion so here is mine. I find it morally if not legally wrong. If an employee was working just one job at either rate he would receive the correct vacation pay. But because a "payroll system" can't handle two different rates the employee suffers. I suggest you get a new payroll system that can handle this or better yet get some finance people willing to do some manual overides/adjustments and make it right. Maybe I have led too sheltered of a life but I just can't imagine suffering a pay loss for taking a well earned vacation. If I remember correctly payroll people used manually figure pay prior to computes.
  • Thank you! My thoughts exactly. As far as being legally wrong, though I haven't been able to come up with proof since the DOL doesn't require paid vacation.
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