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Employee Borrowing Money

I have an employee that is borrowing money all over town. I’ve already had to tell her to stop using the company telephone to call my customers and ask for money, but am now getting phone calls that she is going to various businesses around town or leaving notes on other employee’s vehicles or individual’s vehicles asking for money. She is a great employee, works hard, but we live in a small town and people associate her with my business. Need advise on how to handle this situation.

You don’t have total control over what the employee does after business hours. However, if the employee is contacting other employees or clients, her behavior affects the business and you have every right to request her to stop. The best approach is to be clear to the employee that her conduct is inappropriate and reflects on your business. Remind her that you requested her to stop soliciting money while in the office and you expect her to continue to respect your request in dealing with co-workers and clients. State the positive things the employee brings to the company and assure the employee that you hope her employment will continue by her adhering to set expectations. If the behavior continues it’s best to be more direct in stating that another incident will be cause for termination.

Though it’s not always recommended to become too involved in an employee’s personal matters, you may consider talking to her about why she is soliciting money so often. Maybe some time off or pay advance may help the situation. Before deciding to offer either, make sure you’re willing to offer the same benefits to other similarly situated employees now and in the future.

October 30th, 2014, 12:41 PM |  Posted in: Human Resources Management |
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Prorated Vacation upon Termination

Policy states an employee who is entitled to 80 hours of annual vacation but has not used any and is terminated on 190th day from anniversary date would be entitled to 42.00 hours of unused time. 190/365=52% of 80 = 42.00. But what if the employee used some vacation, say 56 hours and had 24 hours left. Would he be entitled to any of the 24 hours that is left? If so, how would that be calculated?

Unless the vacation policy is under a collective bargaining agreement or employment contract, employers are able to adopt a vacation policy of their choosing. In doing so, employers must ensure that vacation policies are clear and easily understood.

The above policy is not clear. It says if the employee has not used any time he will be entitled to 42 hours at termination. This can be read as the employee must not use any vacation time whatsoever in order to receive 42 hours paid out at termination. This doesn’t appear to be to what you mean. You, as the employer, must determine what exactly will be paid to employees at termination and the policy must be updated as appropriate. It’s much less of an administrative burden and much less confusing to pay out any accrued but unused vacation time. However, if you decide to use a calculation method, you must determine the method and apply it uniformly.

An employer is permitted to impose certain restrictions or conditions regarding vacation payout. Keep in mind that some states impose guidelines on vacation payout at termination. Thus, employers must consider applicable state legislation prior to adopting a vacation policy.

October 30th, 2014, 11:54 AM |  Posted in: Benefits |
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Reduction of Pay for Exempt Sales Employee

I own a small business in Florida with only one salesperson. When they were hired, the compensation was a base plus commission. However, she is not meeting the goals that have been set for her over the last 90 days. Is it legal for me to reduce their salary or eliminate it altogether and offer a commissions only compensation? Are there guidelines as to how much the salary can be reduced? This is an exempt employee working full time (40 hours per week). If a reduction is allowed, it is only for a specified amount of time?

The Fair Labor Standards Act (FLSA) provides exemption from minimum wage and overtime pay provisions to select employees including those employed in outside sales. Outside sales employees sell employer’s products or services away from the employer’s place of business. Inside sales employees, meaning those who work at the employer’s location, or employees whose sales are made primarily via phone, mail or internet generally don’t qualify for the exemption.

Three conditions must be met in order for a commissioned employee to be exempt under the FLSA: the employee must be employed by a retail or service establishment, the employee’s regular rate of pay must exceed one and one-half times the applicable minimum wage for every hour worked in a workweek in which overtime hours are worked, and more than half the employee’s total earnings in a representative period must consist of commissions. The employer must establish a representative period which can be as short as one month or up to one year. Unless all three conditions are satisfied, the exemption doesn’t apply.

Generally, an employee classified as exempt must receive his full predetermined salary for any week in which work is performed without regard to the quality or quantity of work. However, absent a contract stating otherwise, employers are able to change the compensation agreement for exempt sales employees as deemed appropriate. Compensation for a sales employee can be base salary plus commission or commission only and can change at the discretion of the employer.

Keep in mind that the change in commission structure must be made prospectively. Meaning, the employee must be notified of the change and the new policy implemented for a future date, not retroactively. Some states, like California, require such a notice to be provided in writing to the employee. Even if the employer is not legally required to put the compensation structure in writing, it’s best practice. Hope this answers all your questions!

October 30th, 2014, 11:18 AM |  Posted in: Compensation, Human Resources Management |
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Exempt Employee with Partial Day PTO/Absence

I have an employee that is exempted and requested to be off for a full week but only had 4 1/2 paid time off days accrued. Since she didn’t have 5 full days of paid time off can I only pay her for 4 1/2 days?

The Fair Labor Standards Act (FLSA) establishes compensation guidelines for employees including classifying employees as exempt or non-exempt. To qualify for exempt status, an employee must be paid on a salary basis, must earn at least $455 per week and must perform certain job duties. The salary basis cannot vary based on the quality or quantity of work performed, regardless of the number of days or hours worked. Generally, an exempt employee must receive her full predetermined salary for any work week during which work is performed.

It is permissible to deduct from an exempt employee’s salary for full day absences under certain circumstances including when an employee is absent for one or more full days due to personal reasons, other than sickness or disability. The requirement to pay the full day’s salary to the exempt employee for a partial day absence is the same for employers who have a bona fide leave plan as well as for those without a leave plan. Thus, employers shouldn’t deduct wages to cover partial day absences if the exempt employee doesn’t have enough paid time off to cover the absence.

October 27th, 2014, 11:57 AM |  Posted in: Human Resources Management, Labor Laws |
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Vacation Policy in Connecticut

We are in Connecticut and are considering changing our PTO policy to allow employees to borrow and use unaccrued time. If the employee leaves the company can the employer deduct the unaccrued portion from their paycheck?

In Connecticut, vacation time is considered to be a fringe benefit not required by law; thus, employers are free to adopt a vacation policy of their choosing. Allowing employees to borrow time is generous of employers; however, doing so creates the problem of recouping the wages for used but unaccrued time. Connecticut employers are not permitted to deduct any portion of an employee’s wages unless the employer is required or empowered to do so per state or federal law or the employer has written authorization from the employee for deductions on a form approved by the Wage and Workplace Standards Division. So, it may be less of a hassle to not allow employees to borrow vacation time.

October 23rd, 2014, 1:27 PM |  Posted in: Labor Laws |
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