Our firm is now saying it is illegal for them to offer us comp time for overtime hours and paying us straight time on unused overtime at the end of the year is also illegal. We are salaried employees. Is this true?

Here is an exact quote from my offer of employment letter which might explain what they are doing currently better.

“At this time, the firm compensates Compliance Auditors, on a straight-time basis, for hours worked in excess of 40 per week. These payments are made quarterly, and after you have “banked” your first 40 “hours in excess.” At your discretion, your banked hours may be applied toward time off during the year or paid to you shortly after the close of the year.”

And here is an exact quote from the employee handbook.

“Payroll Auditors will have the first 40 hours of overtime banked to be taken as additional time off during the year. All other overtime incurred will be paid on a quarterly basis. Unused banked overtime, not used as time off during the year in which it was earned, will be combined with overtime earned during the fourth quarter. It will be paid with the fourth quarter overtime pay out. “

I understand they are not required by law to pay us for the overtime worked? But is it illegal for them to do what they have been doing for the last 5 years?

Thanks,
Justin

As far as I know, only public employees may be offered comp time legally.

Without knowing your specific job duties, I suspect that a payroll auditor is a non-exempt position. Even though you are being paid on a salaried basis, the over-riding factor will be that you do not qualify as an exempt employee. If this is the case, it is illegal for them to substitute comp time for overtime. They probably just realized that and will likely be taking steps to pay for overtime or limit overtime. If you have noticed these policies as well, then this is probably the case.

If you are an exempt employee, they are not required to give comp time but it is not illegal for them to do so.

Without knowing your specific job duties, I suspect that a payroll auditor is a non-exempt position. Even though you are being paid on a salaried basis, the over-riding factor will be that you do not qualify as an exempt employee. If this is the case, it is illegal for them to substitute comp time for overtime. They probably just realized that and will likely be taking steps to pay for overtime or limit overtime. If you have noticed these policies as well, then this is probably the case.

If you are an exempt employee, they are not required to give comp time but it is not illegal for them to do so.

They are treating us exempt employees and have no intention of paying OT or treating us as non-exempt.

So basically if we are in effect exempt they don't have to give us comp time but doing so is not illegal nor is paying straight-time for overtime. Correct?

If you are legally Exempt under the federal FLSA law, then you have no legal right what-so-ever for paid overtime and no legal right what-so-ever for so-called "comp time".

If you are legally Non-Exempt, then private sector employees must be paid overtime for all hours worked past 40 in the work week.

Salaried is just a payment method. Any Non-Exempt employee can be paid on a Salaried or Hourly basis. Any Exempt employee can be paid on a Salaried basis, although certain Exempt classifications must be paid on a Salaried basis.

Saying someone is paid on a Salaried basis says nothing about whether the employee is Exempt or Non-Exempt.

If I can make a suggestion, the only issue of substance if whether or not you are legally Exempt and if so under which specific classification. The FLSA Exempt classification rules can be found below. Take your time and read the rules. Then ask yourself honestly whether or not you can legally be considered Exempt and if so under which classificaition. If the answer is no, then have a quiet, polite, burn-no-bridges conversation with your employer and ask them what they are doing.

http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm

If you are legally Exempt under the federal FLSA law, then you have no legal right what-so-ever for paid overtime and no legal right what-so-ever for so-called "comp time".

If you are legally Non-Exempt, then private sector employees must be paid overtime for all hours worked past 40 in the work week.

Salaried is just a payment method. Any Non-Exempt employee can be paid on a Salaried or Hourly basis. Any Exempt employee can be paid on a Salaried basis, although certain Exempt classifications must be paid on a Salaried basis.

Saying someone is paid on a Salaried basis says nothing about whether the employee is Exempt or Non-Exempt.

If I can make a suggestion, the only issue of substance if whether or not you are legally Exempt and if so under which specific classification. The FLSA Exempt classification rules can be found below. Take your time and read the rules. Then ask yourself honestly whether or not you can legally be considered Exempt and if so under which classificaition. If the answer is no, then have a quiet, polite, burn-no-bridges conversation with your employer and ask them what they are doing.

http://www.dol.gov/esa/regs/compliance/whd/fairpay/main.htm

I did exactly as you advised and the only explanation as to why we would be exempt is the professional exemption since we work in an accounting firm, but we are not accounts in my open as we do compliance audits further we all have bachelors in different areas other than accounting, let alone a masters or are working on our CPA..

Here is the job description given:

Payroll Compliance Auditor

Responsibilities and Qualifications

An entry-level position but experience is a plus. As a compliance auditor, your responsibilities would include scheduling of assignments, choosing of a sample to audit, expansion of the sample and preparation of the final report. This position entails 50% travel throughout the United States. Applicants must possess excellent oral and written communication skills and a Bachelor’s Degree in Business, Finance, Accounting, Economics or Business.

This position requires self-motivated individuals who have a demonstrated ability to work well in a team environment. Excellent oral and written communication skills, along with the ability to meet deadlines and budget time efficiently, are mandatory.

Thoughts?

Thoughts?

Sure. Maybe yes. Maybe no. Just because someone works in an accounting firm by itself means nothing. A janitor working in an accounting firm does not meet the "Professional" qualificiations. The only opinions that matter are yours, your employer's and DOL's. What do you think?

When I have been involved with this we basically took all job descriptions for all employees, I was one of three people they put in a room, and we reviewed all job descriptions against the rules. Many of the job descriptions we sent back and told the supervisor/manager to try again, generally with a lot more detail. Everything that everyone agreed was Non-Exempt went into that pile. Everything that everyone agreed was Exempt went into the related Exempt classification pile, along with a 1/2 page "standard" layout memo with our justification. Everything we could not agree on got sent to an outside expert.

It is a lot easier doing this if (for example) you look at every single job description in say the Accounting department at the same time because you have different items to compare. We can figure out those department specific items which we want to argue act as a "boiling point" to support the Exempt classification. Having a three person group helps because we disagreed a lot, and having additional opinions helped smooth out the process. At the end of the day, the employer needs to have a clear narrative on why they think some employees are Exempt and others are not. It is difficult to take a single job description out of context and come up with a clear answer.

No one at DOL cares about my opinion of your Exempt status. I do not care about my opinion of your Exempt status because I can see a possible argument either way. IMO, DOL did not go out of it's way to create rules with clear "bright-lines". At some point, you maybe need to talk to DOL. Or maybe post your question on the AHI website. They have a former federal DOL auditor who responds there and his opinion is worth more then mine on this subject.

http://www.ahipubs.com/cgi-bin/ubb/forumdisplay.cgi?action=topics&forum=Employment+Law+Talk&number=1&DaysPrune=45&LastLogin=

Just to throw my $.03 in here (I've been in payroll 30 years this year, so my fees have gone up), I'm thinking this could possibly be exempt under the Administrative classification. The job does appear to require the exercise of discretion and independent judgment with respect to matters of significance and the work “directly related to management or general business operations” includes.......auditing....quality control.....
http://www.dol.gov/esa/regs/compliance/whd/fairpay/fs17c_administrative.htm

However, this is NOT an entry-level position.:rolleyes: :eek:

Agreed. The Administrative exception is often easier to justify then the Executive or Professional exceptions, and it does not matter which exemption actually ends up being used. Employers generally pick which ever exemption is the easiest to justify, which is not always the obvious choice.

Thanks for all the input and help I'm looking into the administrative section.

Looks like we might qualify based on our primary duty being directly related to management or General Business Operations as we are auditors.

But under the discretion and independent judgment section, I think we fail to qualify under that section as we follow a very limited scope and don't have the authority to use independent discretion as we check with our supervisors on all issues.

And I do not think we meet the matters of significance section either.

We have a meeting in a couple hours to be formally told our OT is gone but we want to be sure they are not screwing us and since they forced me to research exempt vs. non-exempt I would love to know why they are classifying us as exempt.

Just to throw my $.03 in here (I've been in payroll 30 years this year, so my fees have gone up), I'm thinking this could possibly be exempt under the Administrative classification. The job does appear to require the exercise of discretion and independent judgment with respect to matters of significance and the .
http://www.dol.gov/esa/regs/compliance/whd/fairpay/fs17c_administrative.htm

However, this is NOT an entry-level position.:rolleyes: :eek:

Doesn't auditing in this sense refer to internal auditing to ensure the managment or general business of the company is run correctlt. We audit outside companies which is the service the employer is in business to provide.

*For some reason the qoute you posted in your post didn't show up but that is what I was reffering to.

Thanks for all the input and help I'm looking into the administrative section.

Looks like we might qualify based on our primary duty being directly related to management or General Business Operations as we are auditors.

But under the discretion and independent judgment section, I think we fail to qualify under that section as we follow a very limited scope and don't have the authority to use independent discretion as we check with our supervisors on all issues.

And I do not think we meet the matters of significance section either.

We have a meeting in a couple hours to be formally told our OT is gone but we want to be sure they are not screwing us and since they forced me to research exempt vs. non-exempt I would love to know why they are classifying us as exempt.

The independent judgment and discretion must be there; otherwise, no exemption under the administrative classification. The job description is meaningless if you don't actually DO what it says. If you follow step-by-step instructions and procedures, by the book, it's likely you don't qualify.

Of course, my opinion and $4 will get you a cup of coffee from Starbucks. ;)
I recommend giving the federal (or state) DOL a call. Theirs is the only opinion that counts.