Keep our mouths shut?

Forrister7 · May 2004

Our payroll person is on probation for a year because of a mistake she made in processing the payroll. (She has been with this company for over 15 years with no prior mistakes.) At the same time she was put on probation, the Managing Partner put an employee - his son - on salary. The son works 32 hours/week but the Managing Partner told Payroll to pay him for 40 hours/week from now on. She has written documentation from the Managing Partner to this effect. Payroll thinks the other 3 partners of the company should know about this decision - which she feels is unethical and wrong - and we are sure the other partners don't know about it and would want the chance to address it with the Managing Partner - but she is afraid of pushing the issue due to her probationary status. She also doesn't want me to say anything to the partners because she's afraid the "leak" would be traced back to her, as she's the only one who officially knows everyone's salaries. So, sage Forumites, I'm asking for your feedback and comments. Should she drop the issue? Try to find a way to let the partners know about it? This is bugging us and both of us feel we are active participants in this unfairness because of our silence.

Don D · May 2004

It would be rather failsafe if you waited about three pay periods and someone then dropped a confidential hint to the other partners. That would take the suspicion from the payroll person. Let the hint suggest that so and so has said he's being paid for 40 and works only 32. You are right that unethical practices should be exposed in ANY company. Some have official ways to have that done anonymously, most don't. See that the hint is dropped.

Leslie · May 2004

The son is on salary? How can you bump a salaried person from 32 to 40 hours? You have some exempt status problems here also that could put the company at risk also.

FunHRBanker · May 2004

What could she have done to warrant a one year suspension? I agree with Leslie, not that the son would do it since he's already being paid for hours he's not working, but he could come back and nail you for OT. Without documentation, you're screwed!

Forrister7 · May 2004

It's a one year probation, not suspension. She overpaid herself by paying her half hour lunches. Of course everything she does leaves a paper trail and the error was eventually found. She claims - and I believe her - that this was an unintentional mistake that occurred when she was changed from a salaried employee to an hourly one. She is paying back the overpayments by having an amount deducted from her checks each pay period. Does this complicate the issue?

Whatever · May 2004

This sounds like a CYA situation. If this is discovered by the other partners, what happens to the payroll clerk who is already on probation (this is a rhetorical question because I think the answer is obvious). The other partners have to be told, either directly or indirectly as soon as possible.

Shadowfax · May 2004

Les and Fun: What's wrong with a 40 hour salary working 32 and getting paid 40? Whole purpose of salary - get job done quickly and head out, And were is the o/t problem? Not only is he not working o/t he's working 8 hours less. Bigger question is why did probationary ee get moved from sal to hourly, now her replacement is salary. Maybe there is a problem with the job duties.

Leslie · May 2004

I don't have a problem with an exempt working 32 hours. I do have a problem with an exempt's salary being increased based on hours that are not even worked instead of performance or what the job is worth.

szemcumo · May 2004

I would hesitate to discuss this with anyone expect the boss and let him know that you feel that even though this is his son, it is not right to grant special favors. Letting info out that only the accounting depart., HR and the manager should know, I feel would eventually lead back to you putting your job at risk.

FunHRBanker · May 2004

The problem with OT is he does not qualify as an exempt person, he can come back and say he worked 50 hours a week and was only paid for 40 and is owed back pay for 10 hours of overtime a week. I agree with szemcumo, talk to mgr and tell him son does not qualify as exempt under FLSA and the company could be in legal hot water if he was doing special favors for a family member.

Brad Forrister · May 2004

How about suggesting a review of overtime status, since the new regs are going into effect? Or perhaps requesting a copy of all the exempts and the hours they're being paid for, with copies to all the partners for their review?

Do I detect a little extra subtext in this situation - that the managing partner came down hard on this person by putting her on probation for a year, then at the very same time implemented a decision he didn't want questioned?

Does the son qualify for exempt status?

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

Don D · May 2004

The primary reason I don't advocate trying to reason with the senior partner, and educate him as to the regulations of the FLSA, is that he initiated this whole thing in an obviously fraudulent manner by telling someone to cheat the system. He's not likely to give one whit about the law. The man is crooked as a sidewinder. You're more likely to lose your job by red-flagging your obvious doubt of his knowledge of the law. You don't reason with a crook. You expose him. As soon as you intimate to him that "You can't do that under the law", you are a goner.

Forrister7 · May 2004

Brad and Don:
You are both astute in your observations that 1. the managing partner came down hard on this person by putting her on probation for a year, then at the very same time implemented a decision he didn't want questioned. and 2. the managing partner does not care about the law, and that he is making the payroll person cheat the system for his son's benefit. As far as he's concerned, this is his business and he can do what he wants as long as the other partners don't question his decisions. He is the King. And as the partners are all busy MDs with full time practices, for the most part they don't want to be bothered with the dirty details of the business as long as they keep collecting their pay checks. I have tried in the past to get them to see problems within the business, and while they do pay attention for a short while, they accept any "explanation" that the managing partner gives them for the problems and go on with their lives. I, too, need a paycheck and have been reluctant to push the issues, though I see them as important.

Rockie · May 2004

I agree with others There are some other issues here. Is the son's job one that would qualify for exempt status? If so, it doesn't matter whether he works 32 or 40 hours as he is paid for the job. I guess I don't understand the comment "He is working 32 but pay him for 40 from now on?" Sounds like he is being paid by the hour. This is the age old, inherent problem of what can happen when relatives, especiallly those of the owner or manager, are allowed to work in the company.

This is an ethical question and I'd have a hard time dealing with an individual that is this dishonest...If there is a way to give this tidbit of info to the other partners anonymously, then I'd do it. But be prepared (1) they might not care if he is doing this and (2) it will probably be traced back to the source (payroll) since she is the "keeper" of the salaries. Just be prepared for the consequences.

Good luck.

Gillian3 · May 2004

The bottom line to this one is ethics, yours and theirs. Can you live with the ethical lapses, or not? Have their been other ethical issue that you have disagreed with? Are there other violation that you know about which are more serious that wage/hour violations? Is this your "final straw" that makes you do something? What will be the effects of your "doing something"? Does your "doing something" mean internally or blowing the whistle outside and is there anything bad enough to go outside? Do you want to take the heat if you do? Is it easier to just quit and go find an organization whose ethics matches yours? From one who knows.

Gillian3 · May 2004

If this shows up as somewhat of a duplicate, please excuse - the response that I did an hour ago hasn't shown up. Anyway, the bottom line to this one is ethics - yours and theirs. Is this the first time that you have had an ethical dilemma? If so, can you live with it? Is this a "final straw" issue for you? Are you aware of other issues that are more serious than wage/hour? If there are other issues, are you going to bring them up, and if so will that be internally or externally? Are you willing to take the heat? Do the ethical issues override the benefits that you get from working there? Is it easier to just walk away and find a job in a place where ethics are more compatible? From someone who has been there!

marc · May 2004

I have a little different take on this than the others. Who hired the guys son? I am assuming he did the hiring. Who set the rate of pay?. Again, I am assuming the managing partner did it.

I also assume the son is a salaried exempt position. Does it matter if the guy is paid $10 per hour for 32 hours or $12.50 per hour for 32 hours? It is just a question of pay scale. Perhaps the Managing Partner determined the job he has his son in is worth the higher pay regardless of the math used to get there.

I think you are heading for trouble if you "bust" the managing partner for this. Get your resumes polished up and be prepared to find another job if you take to the other, non-involved partner. It sounds like the other partners don't want to rock the boat.

Suggest to the managing partner that there is a less risky way (from an FLSA perspective) to get his son to the pay level he desires. Be a part of the solution instead of a part of the problem.

Forrister7 · May 2004

Yes, the managing partner hired his son and set the pay rate. The son has an entry level job and gets paid more than all other employees here except the RNs. This is so hard to swallow, so wrong. We've had nepotism issues before with these two. As long as this current Managing Partner reigns I guess he'll rule as he pleases. It's just hard to deal with.

marc · May 2004

Please do not let these antics by the managing partner diminish the value the rest of you bring to the organization. Just because a closely held business can do this sort of thing should not detract from the overall picture. Of course, these "little" things can add up quickly and make your overall satisfaction index tell you it is time to vote with your feet.

Just a perspective to add: If you were the owner of that company and your personal tax man suggested you give jobs to various family members because of the wonderful impact it made on your overall financial picture, would you do the same thing and not explain it to your non-relative EEs?

Breathe deeply, keep breathing, ... move on.

Don D · May 2004

I think the issue appears not to be the fact that 'the boy' is employed there, but that he is given cushy hours and more money than others. Any way you slice it, tax man or not, that's unfair, unethical, unprincipled and a morale buster. I would find a way to expose it to the other partners. If they already know it or don't care, then I'd move on away from it mentally.

5560905 · May 2004

Welcome to the world of the family owned and operated business!

There is little you can do in a family business to counteract open and unfair nepotism. I know, I work for a family business.

I can do one of two things: I can stew about the unfairness of it all - how this or that family member is making all that money and doing NOTHING OR I can accept it and move forward, doing everything in my power to make sure that I get top wages, better benefits and all the other things for those non-family members who pull the freight.

As long as it isn't illegal or immoral, let it go. Just keep pushing for the other employees.

vic · May 2004

I work for a family owned business now and have also worked for others in the past. There is always going to be unfair practices in this type of situation. Along with being HR manager, I also handle the payroll so I know first hand what's going on. Some family members are allowed to take as much vacation as they want. One manager goes on hunting trips for a month at a time - all expenses paid by the company. You just have to decide what you can and cannot deal with.

Mary Poppins · May 2004

I am guessing that there is a good chance the other partners might not care, or would not want to rock the boat. I would send an anonymous note to them anyway, but this could turn out be fuel for them to do something similar. In my organization, senior management tend to stick together even if they do not like each other. If one gets caught with their hand in the cookie jar, sometimes the others go after the cookies as well.

A spoonful of sugar helps the medicine go down.

Mary Poppins

marc · May 2004

My point is that the managing partner has the authority to do the things he has done. He is not directly accountable to the EEs, he is accountable to the ownership structure which is likely based on results, but it may be as straightforward as being based on having the most capital in the deal. If the business suffers because of his decisions then he is the one bearing the greatest monetary consequence. It is a morale buster but he gets to set these parameters.

I have been involved with closely held companies more often than not. This sort of thing is all to frequent to lose a job over.

agunter2 · May 2004

I also work for a small company and the best advise I can give you is to not stir the pot. Most likely the partners won't do anything about it. They have more loyalty to each other then they do you. It was obvious that they allowed this partner to put you on probation for a year. You would be suprised at what they know and don't. If this is something that you can't live with, then you may want to think about leaving, but if I read correctly...you have been there for 15yrs. I am sure this is not the first nor the last time that situations will be unethical. If it is or has become illegal, the partners will most likely find a way to make it legal, while still having the same outcome. Wish you the best.

Forrister7 · May 2004

My thanks to each one of you who took the time to share your valid points and diverse positions on this topic. This is what makes the Forum so valuable for those of us who seek guidance on tough issues. The Forum is a constant source of enrichment.

Keep our mouths shut?

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