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Aug14

Employee Hours

How many hours can we require employees to work in a week? Some of our exempt employees are under the impression they can’t work more than 40 hours a week.

There is no minimum or maximum number of hours employees can work in a day or workweek. There are industry standards and, of course, basic sense that employers must consider.

Compensation requirements for employees are set forth under the federal Fair Labor Standards Act (FLSA). The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are classified as either non-exempt or exempt. Hourly and salary paid are compensation terms.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Most employees are considered non-exempt. Non-exempt employees must receive time and one half their regular rates of pay for any hours worked over 40 in a given workweek. Again, there is no maximum number of hours a non-exempt employee can work. But, a non-exempt employee must be paid for every hour worked and be paid overtime as appropriate.

Conversely, exempt employees receive a fixed predetermined salary for any week during which work is performed regardless of the quantity or quality of such work. Exempt employees are excluded from overtime pay provisions. So, there is no requirement to provide additional compensation to an exempt employee for hours worked above their normal schedule. Again, there is no maximum number of hours an exempt employee can work.

An employer can ask an exempt employee to work 70 hours a week without additional compensation. Of course, this is not good business practice and most likely will result in high turnover and low productivity.

It’s worth noting that some states have adopted daily overtime regulations and days of rest laws. So, it’s important to know if any such legislation is applicable in your state.

HTH!

August 14th, 2018, 9:12 AM |  Posted in: Compensation, Workplace Management |
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Aug14

Termination Letter

Do we have to give employees a written termination letter with a stated reason?

Written termination letters are generally not required by law. However, some states have adopted written notification requirements. So, it’s best to be aware of the laws in your particular state. Feel free to comment with your specific state and we can research the applicable laws.

Some employers choose to provide written termination notices to employees as a record for both the employer and employee. The letter confirms the employee’s separation, reason for separation, and effective date. It may also include pertinent information like when healthcare benefits will terminate or who to contact with any questions about fringe benefits.

Most states have an at-will employment doctrine. Meaning, absent an employee contract or collective bargaining agreement, either employer or employee can terminate the employment relationship without cause or notice. Of course, the reason for termination cannot be discriminatory based on protected characteristics defined by federal and state laws.

Providing a reason for the termination is good practice. Doing so confirms with the employee that the termination is for a valid business-related reason and nondiscriminatory. Otherwise, the employee is left to consider any reasons why he was terminated and may feel he was unlawfully discriminated against.

HTH!

August 14th, 2018, 9:02 AM |  Posted in: Termination |
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Aug14

Employee Leaving Early

We have a salaried employee who continually leaves early? She says she’s completed her work for the day and has a right to leave when she’s done. Can we dock her pay for non-worked hours? It doesn’t seem fair to us that we’re paying her a salary to work 40 hours and we’re lucky if she puts in 30 hours each week.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are classified as either non-exempt or exempt. Hourly and salary paid are compensation terms.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Most employees are considered non-exempt.

Conversely, exempt employees receive a fixed predetermined salary for any week during which work is performed regardless of the quantity or quality of such work. Exempt employees are excluded from overtime pay provisions.

It’s important to properly classify employees based on their job duties. Though uncommon, a non-exempt employee can be paid a salary.

Let’s assume the employee is exempt.

Deductions from exempt employees’ salaries are permitted only in limited circumstances including:

Docking an exempt employee’s salary for less than a full-day absence is only permitted during the employee’s initial or terminal week of employment or for unpaid FMLA leave. Otherwise, only full-day deductions in accordance with the above guidelines are permitted. Docking an exempt employee’s salary for leaving early would violate the FLSA’s salary basis rule.

An employer is able to require employees, exempt or non-exempt, to use PTO accruals to cover any hours missed from the workweek. So, if an exempt employee chooses to leave early, then the employer is permitted to require the employee to use their PTO for such time. But, if an exempt employee has exhausted his accruals his salary cannot be reduced unless doing so is in accordance with the FLSA rules stated above.

The employee does have a point that exempt employees are typically given more freedom to complete their work assignments. In doing so, though, the employee should also be working more hours when necessary.

If you’re noticing the employee is continually leaving early maybe she doesn’t have enough work to do. You can either give her more responsibilities or consider changing her position to a part time one on a permanent basis and reducing her salary proportionately.

HTH!

Aug14

Employee Handbook Update

We are revising our employee handbook. Do we need to have all employees sign an acknowledgment of receiving the new handbook or can we just distribute it?

A signed acknowledgment from each employee is best. This ensures you have a clear confirmation that each employee received the updated handbook. Such confirmation can be a signed acknowledgment form or an electronic confirmation.

Remember, the purpose of an employee handbook is to ensure employees are aware of important policies and procedures. In order to properly hold employees accountable to those policies and procedures it’s necessary to ensure they’re aware of them. A signed acknowledgment does just that.

Depending upon your company/culture and the significance of the changes made, it may be best to not only distribute the new handbook but also discuss the updates with employees. For example, if you’re updating a paid time off policy then it’s best to inform employees of the specific changes.

HTH!

August 14th, 2018, 8:41 AM |  Posted in: Human Resources Management |
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Aug11

Moving from Calendar Year to Anniversary Year Vacation Plan

Hi, We’re currently in the process of changing our vacation policy from a fiscal year (July 1) to anniversary date. Our biggest issue is how to do so equitably. Do you have any best practices? Also, is this a good idea or are we taking step in the wrong direction?

The fairest option is to make the first year a transition year. So, on July 1st, the start of the fiscal year, employees would receive a prorated amount of their vacation time to cover them from July 1stto their anniversary dates. Then, on their anniversary dates they’re new vacation plan year would start.

Let’s say employees receive 2 weeks of vacation time per year and work a 40 hour workweek. These employees earn 1.538 vacation hours per week (2 weeks vacation x 40 hour workweek = 80 hours vacation per year. 80 hours vacation per year / 52 weeks in a year = 1.538 hours of vacation time earned per week.)

Let’s also say effective July 1, 2019 all employees will transition to the anniversary year vacation plan. Now, each employee’s vacation time must be prorated during the transition year. Here are a few examples:

Mike’s anniversary date is August 12th. So, on July 1, 2109 he would receive just enough vacation time to cover him from July 1stto August 12thor 6 weeks worth. 1.538 vacation hours earned per week x 6 weeks = 9.228 vacation hours. So, he would receive 9.228 vacation hours on July 1, 2019 which would cover him until August 13, 2019 at which time he would receive his normal entitlement to cover him for his full anniversary year.

Fatima’s anniversary date is March 2nd. So, on July 1, 2019 she would receive enough vacation to cover her from then all the way to March 2, 2020 or 35 weeks worth. 1.538 vacation hours earned per week x 35 weeks = 53.83 vacation hours. So, she would receive 53.83 vacation hours on July 1, 2019 which would cover her from then until to March 2, 2020 at which time she would receive her normal entitlement to cover her for his full anniversary year.

The same calculation can be used for any situation. Just make sure to adopt a rounding practice.

Prior to the effective date of the transition it’s best to consider any possible issues and proactively address them. Also, it’s best to announce the transition well in advance and make sure you clearly explain the transition year so employees understand they won’t be losing any vacation time.

Now, whether you should make the transition or not is completely up to you. There are pros and cons for both calendar and anniversary year vacation plans. Determining the best option will depend on the number of employees, who’s administering the plan (really how much oversight is manageable) the culture of the company, and employees’ needs/wants.

Here a few things to consider:

The calendar method is fairly straightforward. Everyone gets their vacation allotment or starts their accrual on the same date, easy. But, with the calendar year method employees hired mid-year must be pro-rated if using a lump sum method. This is not a big deal and is done with a standard calculation. Also, with this method there is often a surge of employees wanting to use their vacation time at the end of the year (either because they’ve been holding on to it all year to use it for the holidays if using a normal calendar year or because they’re trying to use any remaining time before the plan year is over if carryover is not permitted). There are ways to deter the end of year rush with a calendar method such as allowing negative balances and the borrowing of vacation time, implementing blackout dates for vacation usage, and overall good employee management.

Using an employee’s anniversary date as their vacation plan year is also fairly straightforward as long as every employee has a clear start date. There are calculations associated with this method as well but again they’re standard. However, depending on whether employees receive a lump sum or accrue vacation time, there may be more calculations and oversight needed. End of year vacation request surges are not an issue when using the anniversary date since employees are often hired at various times throughout the year. Also, if you use tiered vacation plans based on tenure, it’ll be easier for both you and the employees to determine which tier applies when using the anniversary date.

HTH!

August 11th, 2018, 12:13 PM |  Posted in: Benefits |
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