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Wednesday, October 28, 2009

Exempt Day Swapping

What impact does pay periods have on exempt employees who wish to make up time? If an employee takes a couple of hours off but desires to make up the time, why does it have to done in the same pay period?

To put us in context, the majority of the staff are exempt, we currently get paid on the 5th and 20th of each month, have vacation and sick buckets and work 9/80 with every other Friday off.

I ask this because a couple of employees worked on what would have been 'Off Friday on 10/9'. One of the employees had a scheduled sick day [medical apt] for the following Friday which would have been 'On Friday on 10/16'.

He asked could he cover his medical apt with his 'Off Friday time worked' rather count it against his sick time. I allowed it. However the owner raised a fuss because the medical apt time off was not in the same pay period as the time worked, but she allowed 'this time'.

Pay periods have no impact on when exempt people take time off, or switch schedules, or what have you. Legally. An exempt person gets paid the same every paycheck and that is that.

Now, a non-exempt person is a different story, because if they work more than 40 hours in a given week, they have to receive overtime pay, even if the reason they worked was to make up for time they took off in a previous week.

But, this is an exempt question. What you did is perfectly reasonable. Your employee knew he was going to be gone on a specific day, so he asked to swap his days off, so as to not have to use PTO. Super! No problem. It's no problem because it doesn't matter, in terms of pay, when an exempt employee works or doesn't work.

The owner "allowed" this, but said not to do it again. I'm tempted to ask her what purpose this would serve. I'll tell you. It would serve to further alienate employees! Yeah! Just what you want.

However, the owner certainly is within her rights to not allow this. Companies can set the rules for time off. And even though you have to pay exempt employees, you can dictate the rules and discipline if they break them. So, yes, she could say, "No, sorry. You can't swap days." Is this dumb? Yes. But, sometimes owners/managers think that they are doing favors for their employees by giving them jobs. They feel like they are handing out Halloween candy and you better darn well say thank you, even if they hand out those nasty peanut-butter things in the orange and black wrappers. And if you don't they yell at you for your lack of manners. They forget that the reason you are working for them is that it benefits the owner/manager/company. (If it doesn't, you should be fired.)

So, the pay periods thing is her rule. Fine. You live with it. But it's not (as far as I know, not being a lawyer or anything like that) illegal to do so.


Inside the Philosophy Factory said...

IF the work is such that someone has to "cover" responsibilities, I do think there is kind of a good reason for not permitting this to happen on a regular basis.

Think about it this way, if it's convenient for me to swap days -- and everybody swaps the same direction, then you'd end up with everyone working on the same Fridays and nobody working the alternate Fridays.

If everyone's work is pretty much independent or not really time critical, then there is no reason to worry about it as long as whatever you are doing on Thursday can wait for input from others until Monday.

Lydia Theunissen said...

Often a policy like this is not HR-driven: it’s accounting-driven. This is fairly normal practice in US Government contracting where an exempt employee’s salary (and corresponding billing rate and thus Company profit) is based on a set number of expected work hours. The salary is the same each payperiod irregardless of number of expected work hours in the payperiod. The process of keeping track of when and which employees “switch” workhours/schedule can be difficult (but not impossible, granted) for supervisors to manage in a way that is perceived to be fair by all employees.

Although employees are supposed to work the expected work hours over the year, it’s easier to (micro)manage on a payperiod-by-payperiod basis. Should the employee work less than the expected work hours (which are generally around 1972 annual productive hours out of a possible 2080 hours) upon which a billing rate is based, the company takes a hit in profitability…and that’s where accounting comes in.

In my experience, accountants like predictability and like hard-and-fast, predictable schedules and expenses (and, yes, some of my best friends are accountants).

There’s also an issue of fairness that can be missing when supervisors allow some exempt employees to change schedules and not others; having a tight payperiod control over such changes helps with perceptions of fairness in scheduling for all employees.

Anonymous said...

From Webster dictionary: Irregardless is not standard English!!

nonstandard : regardless
usage Irregardless originated in dialectal American speech in the early 20th century. Its fairly widespread use in speech called it to the attention of usage commentators as early as 1927. The most frequently repeated remark about it is that “there is no such word.” There is such a word, however. It is still used primarily in speech, although it can be found from time to time in edited prose. Its reputation has not risen over the years, and it is still a long way from general acceptance. Use regardless instead.

Lise F said...

Hey, I like those peanut butter candies in the orange and black wrappers! ;)

human said...

I had a job with bosses like that once. I arranged to take a long weekend TO DO A JOB TRAINING. They made me use my PTO, but I really wanted the professional development opportunity so I did it anyway. Then they gave the entire office the day off on one of the days I had already scheduled PTO. They informed me that I still had to count it as one of my PTO days though, because "they had to make plans for me to be out of the office." Uh huh. Glass-bowls.

class-factotum said...

Oh Anon 5:59. Put away the red pen and lighten up.

Anonymous said...

Anon: Thank you! Next time can you also address people who "unthaw" their dinner before cooking it?

An Accountant said...

As a cost accountant for a company with government contracts, I agree with what Lydia said. Depending on how the accounting structure is set up and how the contracts were written, taking time off in different periods can affect billings/cash flow/etc. Even if the company doesn't have a problem with allowing it, it may cause issues when it comes to an audit, so having the policy in place helps to minimize that burden. I don't know if that is the case in this scenario, buy Lydia is may be an accounting-based decision. Those darn evil accountants!

And yes, irregardless is not a word...that was actually a question on the GMAT test.

Anonymous said...

Anon, thanks. I almost my mind in High School when our principle put in place a system "debarring" people from class.."bar" is enough thanks. And I'm not even going to start about the blatant misuse of apostrophes these days.

To the original point: What accounting people don't know won't hurt them. One assumes your company isn't doing anything as crazy as making exempt people clock in and out, so it's likely that they'd never have to know about swapped days, unless you tell them. I do agree about staffing control issue, though, dealing with unintended consequences of making exceptions for one person can be brutal at times.

Inside the Philosophy Factory said...

It seems to me that a good manager can set up some reasonable guidelines for swapping. They could be some or all of the following:

1) You can swap with a co-worker who would otherwise be off that day. You work for them, they work for you.

... this seems to be the most plausible -- and least open to abuse.

2) Swaps can only be made for 'sick day' reasons... doctor's appointments for yourself or family, or actual illness reasons. Not for childcare reasons or to extend vacation time.

3) No more than one swap every three weeks -- or, you can't swap more than two weeks in a row.

I'd also permit people to do permanent exchanges of days off.. if it works better for me to have the first and third Fridays off, and a co-worker wants to change with me, why not?

Anonymous said...

"What accounting people don't know won't hurt them. "

Maybe not, but if your timesheets also form part of your billing system (as with the government contractors above), recording time on a day it wasn't worked would be considered timesheet fraud. It doesn't matter if they are salaried or hourly it will result in a billing for time not worked. Timesheets don't just feed payroll, they feed cost accounting, billing, etc. Even if you have the best intentions of making it up the next day, it's still something that can cause a lot of legal trouble for you and your company. What heppens if the employee quits and never "makes up" the time? And if the client looks at the bill and says "I called for John that day and was told he was off"?

Sorry, pet peeve here. People need to look beyond just the timekeeping aspects to how the entire company system works.