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Reducing Hours California

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  • Reducing Hours California

    Sue is our Finance Manager - she is paid well. She is an average worker and does not work a minute more than her 40 hours per week. She has two reports - Jane (Payroll, Benefits, A/R) and Dan (A/P, Jr. Financial Analysis). Both Jane and Dan are eager to learn and take on more - both feel unchallenged.

    Mick, the Controller and Sue's new boss has taken much off of Sue's plate. He is also being pressured into 1. flattening the organization and 2. cutting costs. He has decided to remove Sue's manager role and have all three report directly to him. He has also decided to ask Sue to pass on some of her tasks to Jane and Dan and reduce her hours from 40 to 32. Sue will remain exempt and will be paid the same, prorated for the reduction in schedule. Sue will remain eligible to receive benefits.

    I think this is clear cut and okay to move forward from a legal standpoint. It is a business decision, not a performance related decision. Is there anything I am not considering?

  • #2
    I believe you're on a slippery slope by tying the salary of an exempt employee to the number of hours worked. Exempt, salary based employees get paid the same thing on a weekly basis for doing a job, regardless of the number of hours worked, and by creating a nexus, you are flirting with the notion that Sue is compensated based on the time she works.

    I think it far more tenable to tell Sue that expectations for her work are being reduced, her salary is being reduced accordingly, and, oh, she will probably be able to do the new set of duties in less time than she has spent. Of course, you'll need to keep her weekly salary above the level required for exempt employees.

    I'd also be prepared for Sue's effort to drop off more than the expected reduction. It's kind of a slap in the face to have a managerial title and responsibility stripped, and to assign the work to former subordinates is a slap to the other cheek.
    Last edited by Texas709; 04-04-2013, 11:23 AM.


    • #3
      Agree that it is not a good idea to tie together the # of hrs. worked & salary for an exempt employee. Good post by Texas709.
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      • #4
        Also, depending on Sue's situation this may be the substantial change she's been looking for to quit, get UI, and leave you footing the bill and looking for a new employee that might be worse.