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Salary Employees - Non Exemt/ Exempt Question Indiana Indiana

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  • Salary Employees - Non Exemt/ Exempt Question Indiana Indiana



    Okay..I have a question about exempt versus non-exempt salary employees. When I started at this company in 2001 every salary person that was not a manager or high position in the company was paid for time taken off during the week. I'm in charge of payroll and I couldn't believe how much time was being taken off by people and getting paid for it. When I expalined the situation to the new HR manager who started at the same time, she stated that it was being paid incorrectly. With that said, a change was made.

    The front office people were told that they were not going to be paid for any time missed during the week, but flex time could be used to make it up or vacation time taken. This class of individuals are listed on my pay sheet as non-exempt salaried employees. Mind you when we received our official hire letters we were told we would be paid a salary of X amount of dollars annually with OT available after 8 hrs. in a day. The only time a non-exempt salaried person would receive pay for being sick is if the absence is at least 3 days long and with a doctor note. If you are sick and gone 3 days and have the note it is considered salary continuation and written on your time sheet.

    The next group of salary individuals are foremen on the plant floor. They are called exempt salaried employees with supplemental pay. They receive their 40 hours plus supplemental pay of a certain dollar amount for each hour worked over their regular shift. They are allowed to call in personal business days/ sick days where we are not.

    We have upheld this for the last 6 years until the previous HR manager left and the new one started recently. I mentioned what was being done and she said that can't be. If our hire letter stated we were to be considered salary with a dollar amount on the letter they had to pay us the time.

    It has been addressed to the corporate office now and investigated. I'm wondering your take on this matter. It seems crazy to tell someone that they can only receive pay being sick for more than 3 days. Really, think about it..if I'm truly sick and going to the doctor and start feeling better in a day, why wouldn't I ask the doctor for an extra day or so, just to get "all the way better" and get paid? Besides, we are a union facility for hourly folks and no union for company. When I asked the first HR manager to explain the difference between the two groups she said basically we are just hourly employees called salary. This new one said, no ...that isn't true.

    Can you give me better details?

  • #2
    I read, and re-read your post. I don't see anything wrong with the way that you were paying employees previously.

    It may not have been explained to you before, so let me explain it now. Salary is merely a pay method, and has no legal standing under the law. What has legal standing is exempt or non-exempt. Your application of the law therein seems correct as you are paying overtime to the non-exempt crew.

    The conflict your new HR mgr is having lies in the language of the offer letter and the union contract. If the union contract does not address paid sick time (which would be very odd for a union not to negotiate that benefit) then I turn to the offer letter. The question really is whether or not that offer letter rises to the level of a bona fide contract, and under what terms and conditions is that contract enforcable. In other words, does the fact that the offer letter says x dollars per year mean that the emloyer must pay this as long as they remain an employee irregardless of any absences? The answer is: I DON'T KNOW.

    The CBA and the offer letter need to be shown to an attorney that is well-versed in organized labor AND contract law. No one here can give you an opinion on a contract we haven't read.

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    • #3
      And I do know that sometimes companies say an employee is "salaried" just because they set them up as "salaried" in the payroll system. All "salaried" means in a payroll system context is that the employee is auto-paid the same amount every payroll rather than having to input hours/dollars each time.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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      • #4
        I'm sorry, maybe I wasn't being clear. In response to Bears00:
        The conflict your new HR mgr is having lies in the language of the offer letter and the union contract.
        We, the salaried personnel, in the plant are not bound by a contract. The plant workers are hourly and participate in a union. So there wouldn't be a conflict with the CBA.

        And I do know that sometimes companies say an employee is "salaried" just because they set them up as "salaried" in the payroll system. All "salaried" means in a payroll system context is that the employee is auto-paid the same amount every payroll rather than having to input hours/dollars each time.
        But, if we are auto paid every payroll then doesn't that mean we would receive all the hours regardless of days missed?

        If we are considered hourly for all purposes other than being named "salary" does that mean we could (if we wanted to) join the union? Not that I would have that intention it just seems plausible.

        Thanks for your time!

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        • #5
          Originally posted by IndianaLawSeeker View Post
          But, if we are auto paid every payroll then doesn't that mean we would receive all the hours regardless of days missed?

          Thanks for your time!

          Nope. It's simply a technical method of not having to input the same hours/dollars over and over and over again. I've been in payroll for 30 years now, and it's very common even to set up nonexempt employees who work a regular schedule as "auto-paid". Then the payroll staff merely inputs exceptions, such as paid time off, overtime, etc. Saves a lot of time when the nonexempt employee doesn't have any exceptions to report, which is most often the case.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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