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Compensating a part-time exempt employee
Benefits & Compensation
Compensating a part-time exempt employee
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I'm in CA and my company's practice has been to pay a part-time employee who fills an exempt job at a reduced salary, commensurate with their anticipated schedule. For example, if someone is hired to
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Forums » Topic Forums » Benefits & Compensation » Compensating a part-time exempt employee
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Compensating a part-time exempt employee
posted at 8/8/2006 7:08 AM EDT
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Posts: 103
First: 3/26/2001 Last: 8/8/2006 |
I'm in CA and my company's practice has been to pay a part-time employee who fills an exempt job at a reduced salary, commensurate with their anticipated schedule. For example, if someone is hired to work M-T (80% of the regularly scheduled workweek), we'd pay them roughly 80% of the fulltime compensation. This seems problematic to me but I cannot articulate how or why.
Years ago I worked for another CA employer whose practice was to automatically treat any part-time employee as non-exempt, though they may be performing exempt duties. That, too, seems problematic. Both approaches consider hours worked though, when dealing with exempt employees, that should not be a consideration. Any thoughts and practical approaches? We only have a small number of these situations, but I would like to make a thoughtful recommendation. Thanks for all feedback! PS I am very confident that the duties being performed meet the smell test for exempt status. |
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Compensating a part-time exempt employee
posted at 8/9/2006 2:52 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
I am a "non-full-time" exempt employee.
Knowing that I would only be working a regular week of 30 hours or 75% of fulltime, my employer and I agreed on a salary that takes that into account. I am still exempt and still get no extra payment for any hours over 30. (I rarely in the year I have been here have worked more than 30 and never more than 40). If I ever want to go to 40 hours a week, at that point, my employer and I have an understanding that we would renegotiate my salary. However legally, my employer could ask me to work any number of hours and not have to pay me more than I am currently making, so there is a bit of risk to me. But in return, I get a nice salary and a flexible schedule, so I am willing to work for that risk. If I decided to quit because the employer started requiring more hours (such as 40-50) at the same salary without any increase in pay, I might have a case for "good cause to leave an employer" with the state unemployment board to receive unemployment benefits. But only if I could prove that the employer agreed to negotiate if I ever changed to more than 30 hours a week. rr |
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Compensating a part-time exempt employee
posted at 8/9/2006 5:14 AM EDT
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Posts: 49
First: 8/16/2005 Last: 1/31/2007 |
I am also in CA. THe CA DIR has issued an opinion letter that sort of addresses this issue. The opinion letter can be found here:
http://www.dir.ca.gov/dlse/opinions/2002-03-12.pdf The actual opinion addressed reducing the number of days an exempt employee works and then reducing their compensation. The opinion suggest that this would perhaps put in jeapordy their exempt status (reasons are discussed in the letter.) I wonder then, if CA DIR would consider the reverse to be true: If you increase their salary because the numbers of hours worked increased, could this also jeaporadize their exempt status (for the same reasons stated in the opinion.) |
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Compensating a part-time exempt employee
posted at 8/9/2006 7:12 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
Luckily, I am not in California..*Ü* So CA may very well have policies/laws that would prohibit this
I just googled it and the first site that popped up was UC Davis and here is their policy: http://www.hr.ucdavis.edu/FAQS/Compensation/FLSA/005 I would be surprised if they were going against CA laws. But it could be that they still have to be paid the minimum weekly wage. rr |
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Compensating a part-time exempt employee
posted at 8/9/2006 7:17 AM EDT
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Posts: 49
First: 8/16/2005 Last: 1/31/2007 |
The information that UC Davis has provided is correct, in fact my organization has had part-time exempt employees before. I think the problems come in when pay begins to be adjusted based on the number of hours worked. |
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Compensating a part-time exempt employee
posted at 9/7/2007 8:13 AM EDT
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Posts: 5
First: 8/1/2007 Last: 9/14/2007 |
I see a person here who is a part-time exempt employee. So, in that case, there is not a federal or state (depending on the state) law mandating that if you work over your part-time hours and are an exempt employee, then you are compensated for that time worked? |
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Compensating a part-time exempt employee
posted at 9/7/2007 9:32 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
" I see a person here who is a part-time exempt employee. So, in that case, there is not a federal or state (depending on the state) law mandating that if you work over your part-time hours and are an exempt employee, then you are compensated for that time worked?"
No I am not compensated past my exempt salary for any hours worked over my standard schedule (30). Just like an exempt who is scheduled for 40 but works 50. They do not get paid extra, neither do I. I accepted this position knowing that I would paid $xxK per year for approximately 30 hours per week. Now if either the employer or I wanted to change that agreement, I would suspect it would have to be negotiated. There is nothing in federal or Texas law that requires I be paid for anything more. I still however do make more at "parttime" than the $455 a month that is required under FLSA. It is my understanding that amount can NOT be prorated. rr |
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Compensating a part-time exempt employee
posted at 9/10/2007 7:11 AM EDT
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Posts: 108
First: 2/1/2007 Last: 9/9/2010 |
I am also in CA and have dealt with part-time exempt employees before. When renegotiating a salary because of increased hours the important thing is to think about increased work expectations. Will the person be required to produce more work? Are there greater expectations for the position? So, I wouldn't automatically assume that since an employee is working 75% of the time a full-time employee works then there salary should increase proportionally with the amount of time they work. I would instead say this persons output/duties are expected to increase by 40% and go from there in determining salary. |
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Compensating a part-time exempt employee
posted at 11/24/2008 2:18 PM EST
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Posts: 1
First: 11/24/2008 Last: 11/24/2008 |
If you read this from the California government Labor Board site, you'll see that they state that the term, "part-time exempt employee" is an oxymoron.
http://www.dir.ca.gov/dlse/opinions/2002-05-01.pdf |
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Compensating a part-time exempt employee
posted at 11/25/2008 3:30 AM EST
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
Ive been accused of oversimplifying things, but then Im not in CA. I figure if the duties of a position fit one of the FLSA criteria for Exempt status, and you choose to designate as such, the comp and work hours agreed upon arent a factor. If the employee works two hours a week less, or over, the agreed upon number theyre still paid the same just as a F/T emp. would be. |
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