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Friday, August 21, 2009

A math problem

My problem is more of a math problem, I think. I have an employee on salary that has exceeded the number of vacation days he is allowed. How do I deduct his pay for this unpaid vacation time? I just can't grasp how to figure this out. He is paid bi-weekly, gets 2 weeks (80 hours/10 days, at least that is how it would be for an hourly employee) paid vacation, is required to work 6 days a week (10-12 hours per day).

It's a good thing I took calculus in high school, because it's been extremely helpful in payroll problems. (Thanks Mr. Ward!) I would also like to note (purely for my own self esteem boost) that I was the first female to ever pass the AP calculus exam at my high school.

Okay, this is simple division. Multiple ways to go about it. One, you could be a real stick in the mud and say that you will deduct 8 hours for each day he was gone--which would be rather traditional. Since he required to work 6 days a week, though, I'd take one week's pay, divide by six and have that be one day's pay.

Except I wouldn't do any of this. You have an exempt employee, who regularly puts in 60 to 72 hours a week. Presumably, this is not an easy job, as it wouldn't require so many freaking hours. Exempt employees should get paid for the job, not by the hour. (Some people will argue that you can't deduct at all, I argue that you can in whole day increments, but I'm not a lawyer and even if I were, this isn't the hill I want to die on.)

The hill I want to die on is that you should cut the guy some slack and grant him the two extra days. If he's a good employee this is especially important. If he's a bad employee, start dealing with his issues in another way. He's doing a ton of work. Give him the two days.

Somebody will start shrieking about workplace fairness. Well, to be fair, I think all exempt employees who work their tail ends off deserve some extra time off. Hourly employees are different--not because they are less valuable--but because the laws governing them are different. They are compensated with overtime pay for crazy hours.

You want to keep your good employees happy. You want to either change your bad employees to good employees, or work them out of the organization. This may help with the latter, but not at all with the former.


Charles said...

I think this is more than a simple "math" problem. EHRL is right, you can do the math several ways.

The real issue is that you do not already have a policy on how to handle this situation. Has no one who is salaried in your organization taken more vacation/time off than they currently have earned? Never?

I agree with EHRL that for someone already giving so much time that you could "cut him some slack."

But what about the next employee, also on salary, who wants to take more time off than currently earned and is not a strong performer? Cut him/her some slack too? Refuse the time off? Deduct pay? With these last two options you have just set up a double standard. That's not good. And it is about more than just workplace "fairness."

Ask a Manager said...

He works 60-72 hours a week and only gets two weeks of vacation? Is he an indentured servant?

Not only should you let him have the two extra days, but you should encourage him to take more than that.

The HR Store said...

Very practical advice. It's spot on. Good one.

Another note for the original poster, if you've rbeen reading this blog for long enough you'll know another thing about EHRL's take on exempt employees.

Her First Rule of managing exempt employee time off: Don't tell anyone what you are doing. Just do it. Right EHRL? :)

Evil HR Lady said...

Yes, HR store. I'm a fan of the results oriented workforce. It's difficult because it requires you only hire responsible, reasonable, hard working adults. :>)

And what are all of you doing making comments in the middle of the night? Unless, of course, you've moved to Europe, in which case, come visit me.

George Guajardo said...

I think your approach is reasonable. Very reasonable, in fact. With a name like Evil HR lady I was expecting some cackling and something about working in a cage for the next three pay periods.

The trick to this is how to handle the complaints that will likely come from other employees and managers. I'm my experience, this is the biggest hurdle to overcome. Certainly, extend the same consideration to other exempt employees, but managers will have to learn to focus on results, rather than butts in seats.

Jess said...

Maybe I'm the slow one here, but if he works 72 hours per week, how does two weeks work out to 80 hours?

Ha, ha. EHRL is exactly right. If this guy has the commitment to work these sorts of days and hours, then taking two extra days doesn't demonstrate a lack of commitment but rather a constraint of physics. Would you rather he get sick and take another week off?

As for this fairness baloney, any other employee who works 72 hrs/wk should get exactly the same treatment, and the 40-hour clockpunchers can lump it. If employees are working extra and they aren't effective, you should cut back their hours to something like 45 or 50 immediately. For the vast majority, their productivity will improve. For those who aren't productive at any weekly workload, do you want them working for you at all?

If employees aren't worth their salary at more reasonable hours, then negotiate a lower salary or fire them. If you're "strict" with a poor producer by chaining him to his desk, who are you really punishing?

Anonymous said...

I didn't see that the OP said how much extra time this guy took in the question; but assuming it was 2 days I say he took exactly the right amount of time off... One "week" should be based on one's regularly scheduled hours... 6 days a week= 12 days vacation. Problem solved.

EKM said...

There's a legal issue here... an exempt employee must be paid a full weeks' salary if they work any portion of the workweek, excluding their first and last week at a job which can be prorated for their start and end dates. Time off can be deducted from a PTO bank, but if there is no balance available, they still must be paid their weekly salary. That's part of the definition of the "salary basis test" under FLSA. See this link for a great discussion of this:

If their attendance is a performance issue, manage the real concern.

Bohdan said...

"Deductions from pay are permissible when an exempt employee: is absent from work for one or more full days for personal reasons other than sickness or disability;"

From the DOL link.

So you can legally deduct for days off. If the person doesn't normally have attendance issues and you don't already have a policy in place, I'd probably cut some slack.

And record my rationale so if you have to justify it later you can.

Anonymous said...

If you give him the two days, make sure he knows it so he can feel valued. You don't want to lose a good employee.

Anonymous said...

"It's a good thing I took calculus in high school, because it's been extremely helpful in payroll problems."

I'm sorry, but this problem doesn't even remotely require calculus. Nor would any other problem one would encounter in HR.

Anonymous said...

psst, anon, the calc thing is a joke.