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Dear Workforce How Do We Create an Equitable System for Offering More Paid Time Off

A high-performing employee has requested that, rather than receiving a pay increase, she should be allowed to take more time off. We think this could be a good thing for her and other employees. How do we create an equitable system for this? How do we track the amount of time allowed in relation to an employee’s salary? And what happens if a year or two later, they decide they want the money instead of the time?
June 24, 2005
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Related Topics: Employee Leave, Compensation Design and Communication, Benefit Design and Communication, Dear Workforce, Compensation
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Dear Time:

Flexible scheduling is a hot commodity. Employees always have valued different types of compensation and benefits, depending on both their lifestyle and stage in life. Baby boomers are looking toward retirement. Gen Xers expect increased responsibilities. Gen Y workers require variety. Throw family demands on top of all that and you see that one-size-fits-all work schedules won't retain high performers.
Nothing says you can't grant extra time off for a job well done (unless they're not exempt from overtime rules, and you're trying to do this instead of providing overtime). With a little imagination and a lot of management support, you can structure a variable paid-time-off or flexible work schedule. Employees can elect paid time off vs. additional compensation as a reward for high performance. Under the Fair Labor Standards Act, exempt employees aren't supposed to be paid by the hour anyhow. You pay them for results, whether they work one hour or 60 hours a week.
Sabbatical programs provide another option. This benefit could be applied generally to all employees, as it is at McDonald's. It also could be highly selective (based on specific performance or other criteria), as it is at some professional services firms.
You'll need to run this by your legal department to make sure you're structuring this program in a way that complies with the FLSA rules and is also nondiscriminatory.
SOURCE: Robert Fulton, managing director, The Pathfinder's Group, Inc., an affiliate ofThe Chatfield Group, Chicago, July 29, 2004.
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The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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