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Is Overtime required in the following situation?
Benefits & Compensation
Is Overtime required in the following situation?
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I am a IT manager in TX. Our team consists of a mixture of salaried employees, and contractors who are W-2 hourly employees on our prime vendors payroll. Upper management has recently deci
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Forums » Topic Forums » Benefits & Compensation » Is Overtime required in the following situation?
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Is Overtime required in the following situation?
posted at 2/11/2013 2:35 PM EST
on Workforce Management
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Posts: 1
First: 2/11/2013 Last: 2/11/2013 |
I am a IT manager in TX. Our team consists of a mixture of salaried employees, and contractors who are W-2 hourly employees on our prime vendors payroll. Upper management has recently decided that in order to hold some of our costs down, we are to now inform the contractor staff that they are required to work 50 hours per week, but we will NOT sign a timecard that contains more than 40 hours. When I expressed concern that this might be a wage and labor violation in TX, and that my asking the contractors to do this could even violate the means test of what constitutes a contractor vs an employee, the reply I got was that any wage labor violation complaints that might be filed by the contractor staff would be against the vendor, and not our company. Our VP also stated that if the contractors really pushed back, we were to fire them and find contractors who would be willing to do this for us. Procurement was in the meeting with all of the IT management when our VP gave us this direction, and he concurred that legal had stated that we (as a company) would be in the clear and any complaints that the contractors might file would be against our vendor, and not our company. Is this legal? I don't want to be pulled into any investigation or lawsuit that could be filed by one of our contractors. Some of our contractor staff have worked off and on in our company for the past 4-5 years, and they are older, and NOT inclinded to be pushed around. Are there any recommendations on how I should handle this? |
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Re: Is Overtime required in the following situation?
posted at 2/11/2013 4:08 PM EST
on Workforce Management
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Posts: 173
First: 9/29/2011 Last: 2/11/2013 |
If your contractors are employees of a third party vendor (eg, a contracting/temporary labor vendor), then failure to pay overtime rates for employees who are eligible for such would indeed rest on the vendor. Your company's issue here would likely be a contractrual one between the company and the vendor. Whatever contract exists between vendor and your company needs to be reviewed pronto if in fact that hasn't already happened. By demanding that the contractors work 50 hours but the company will only sign off on timecards with a max of 40 hours, the company is effectively forcing a 20% revenue reduction on the vendor. If the vendor has ample work available for these contractors, I think you can expect to see these contractors taken out and sent elsewhere in short order. |
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Re: Is Overtime required in the following situation?
posted at 2/12/2013 9:44 AM EST
on Workforce Management
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Posts: 147
First: 9/21/2011 Last: 2/12/2013 |
It is going to depend on the relationship between your company and the vendor. I agree with Nork that the wage liability rests with the vendor. BUT I also can't imagine a vendor with a contract who would allow an 'End run" around it like this. Because they are still liable for every hour their employee works even if the contracting company doesn't pay them! But it is going to rest on what is in that contract. Is it a per hour bid or a project bid? I would not have them falsify their time worked. Because not only would that be an issue for a wage claim but also then you aren't being truthful accounting wise on what the project/staffing actually costs. |
Forums » Topic Forums » Benefits & Compensation » Is Overtime required in the following situation?
