Extra Pay for Extra Work

makmhic · October 2002

I would like to inquire about paying an exempt employee extra pay for extra time worked. A full-time exempt employee is considering getting a part-time job to supplement her income. She has asked if we have extra work she could do for our organization for extra pay rather than getting a part-time job. We do have an enormous amount of work that she could do. If we give her extra work along with extra pay, will her exempt status be lost? We are a Maine based employer. Thank you for your assistance.

Pork · October 2002

I would think that if the work you gave him/her was in the labor category of physical work accomplished you might have some difficulty keeping it all straight. I believe an exempt employee like Controller could be paid for hours worked to cut the lawn of the company or as a security guard or as a gas pump operator, as long as the agreed to rate of pay was appropriate for the physical activity. However, don't give the controller booking clerk task to do and get paid accordingly, hire another clerk so "uncle sam" can get more tax dollars. Pork

Theresa Gegen TX · October 2002

She certainly could lose her exempt status. I would have 2 concerns with this issue. First, many exemptions are based on percentages of types of specific work. For example, if the additional work is related to her regular job, but is more clerical, I would think that it would lower the percentage of time she spends on exempt tasks, and could eliminate her exemption.

Second, if you treat her like an hourly employee for some work, and she works over 40 hours a week, that alone may destroy the exemption.

I know it is stupid, but the fair labor standards act is designed to protect employees, even from themselves. Even if the employee agrees to do something, it may not be legal under the act. Generally the DOL will look at the relationship of one employee and one employer to determine exemptions and overtime. They do not look at it by job. The reason being that employers would never pay overtime if they could just say to the employee, here you go, now you have two jobs, each of 40 hours per week, so you don't get any overtime.

I believe it is more trouble than it is worth to help this employee out by giving her additional work at the company. The risk is too great.

Good Luck!

cindyp · October 2002

We dealt with this same situation but we had two separate corporations. Since one person owned both corporations the DOL told us we had to pay OT to an employee who worked for both corps. I had them give me the decision in writing so I could show the owner who couldn't believe it!

wiremanufacturer · October 2002

You could opt to just give her a bonus for the extra time. You could figure that the extra time she works is worth $150 bonus each week. But I would give it to her once a month. I think paying weekly could still look suspicious.

Pork · October 2002

wiremanufactur, I would be very careful of that; wage and hour folks would chew that puppy up real quick if the task are physical and when they spit it out it most likely will have destroyed the exempt status of the primary reason for working this individual. Instead I would as recommended before hire someone else to do the physical hourly work and let "uncle Sam" get his money accordingly. It cost more to play games with exempt/non-exempt status than to keep it clean. Pork

Extra Pay for Extra Work

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