Various questions and answers about the work (Part 1)

Can they force managers to take a pay cut?


My husband is a meat manager in a meat packing plant in Ohio. His employer has asked him to take a $3000.00/yr. pay cut. There have been layoffs throught the plant for the hourly workers, and now they are asking the managers to take a pay cut. He asked for his vacation pay and a lay-off instead of the pay cut. Now his employer told him he would not have to take a pay cut. My question is what is the law on this issue? His employer may ask for the pay cut at a later date, what are his options? Thank you.

Rita Risser responds:

This one goes in to the category of “he’s lucky to have a job.”

If he does not have a written contract, your husband is an employee at-will. He can be terminated, laid off or have his pay cut at any time, as long as it is for a legitimate business reason. If his pay is cut by a significant amount, some states would allow him to quit and be eligible for unemployment insurance benefits. However, he could not quit and sue.

How do we get back money we overpaid employees?

My company’s employees are in an uproar about a recent, unpopular decision. They made a mistake on payroll and grossly overpaid many employees. My question would be is it legal for us to take the money back, and if so is it legal for us to get it back by garnishing entire paychecks until the mistake is corrected?

Rita Risser’s response:

In California, it is not legal for an employer to garnish the employee’s wages to get back over payments. You have to sue each employee in small claims court and then pursue a judgment just like any other creditor. You should be able to win, because the employees knew when they got the money it was not lawfully theirs.

You can ask employees to voluntarily agree to give the money back, and probably most of them will. Work out a mutually agreeable way for them to pay back the money.

Best of luck.

How precise must time cards be?

I manage payroll for a company in North Carolina with approximately 200 hourly workers. All hourly employees are awarded an attendance bonus for punching in/out no earlier or later than their scheduled start time or quitting time. For instance, an employee scheduled 7 am- 3 pm has to clock in before 7:00 am to keep his weekly bonus. It is assumed that he did not start working until the scheduled time. Say they punch their time card at 6:45. Does our company have to pay for the 15 minutes prior to the start of the shift? Also, how precise a calculation should we make (down to the minute?– to the quarter hour?)

Rita Risser’s Response:

If employees come in early for their own benefit (e.g. bonus money) and they do not work during that time, federal law does not require them to be paid for that time. You are allowed to round off to the nearest quarter hour. 29 CFR section 785.48(b).

Can employer require us to falsify time records?

I work at a Los Angeles-based software company where we are salaried employees. The company does not overwork us or short us when we come in late or leave early, so I feel that we are being properly treated as salaried employees should.

We are now writing a database to track our hours. This will be used so that we can know how much time to budget to various projects. It will also be used to produce the time sheets for all of the employees. This is where our debate begins.

Our human resources manager feels that the database should truncate our hours on the time sheets so that it never lists more than 80 hours for the two week period. Others of us feel that truncating our hours would be equivalent to falsifying our time sheet records, which may be illegal. The actual hours listed do not actually matter since we are salaried.

I am trying to find out if we should avoid the truncation of our hours on the time sheets, or if it really does not matter.

Rita Risser’s Response:

Under federal law, employers are required to keep accurate records only for non-exempt (hourly) employees. Since you are exempt, there is no requirement to keep any records at all. Thus, I imagine the Department of Labor would not have a problem with it.

From an ethical perspective, it disturbs me when a company encourages erroneous record keeping. However, this type of practice is widespread. I’ve heard about it in many large corporations.

From a legal perspective, I can imagine a line of questioning about the accuracy of ANY of the records the company keeps if it can be proven that these were not accurate.

From the point of view of creating an audit trail, it seems to me all of your data should match. How can the company audit its own performance with inaccurate information?

It just doesn’t feel right.

How do we get employees to pay back employer?

Our company is getting ready to offer a reimbursement program for technical professional development, for example, Microsoft certification. These programs tend to be very expensive. I know some companies have employees sign an agreement that if they leave within say a year following their training that they will reimburse the company all or a percentage of the cost that was covered by the company. How exactly would you go about trying to recover this money? Would you have to essentially take them to court? Is it worth it for a few thousand dollars?

Rita Risser’s Response:

This is also a problem for employers who give employees equipment for their home or mobile offices. Some states allow employers to deduct all or some of what is owed out of the employee’s last pay check. California and other states do not allow such deductions. Thus, you would have to take the employees to small claims court. A client just told me today that he is responsible for pursuing such claims for his company, but he rarely does because even if the company wins, it’s almost impossible to collect.

What are proper pay practices for exempt employees?

1. What are the guidelines concerning an exempt employee. I am out on the road more then in the office and I was told that this disqualifies me from exempt status.

Rita Risser: Actually, field sales people are specifically exempt. Field technicians are more likely to be exempt than in-house techs.

2. Can a company change an employees status from hourly to exempt with out a salary review?

RR: Yes.

3. Is the company allowed to exclude overtime hours on pay stubs of hourly workers as long as employee gets paid for the work?

RR: No.

4. I was told on my last paycheck that the company failed to deduct for medical and 401k contributions. The next paycheck will have double the deductions. Is this okay?

RR: I don’t know. Probably not. 5. Are there any books that cover these and other questions available.

Must manager’s hours be accurately reflected on pay stub?

I understand that as a manager working over 40 hours per week, the law requiring compensation for overtime do not apply to me.

However, should a salaried employee’s pay stub be recorded on an hourly basis, similar to hourly workers?

For example, though I work 50 hours per week, my paystub reads only 40. I guess it just rubs me the wrong way.

Rita Risser’s response:

This is legal because it is done for reasons of payroll convenience. Managers cannot use such notations as reasons to stop working after 40 hours.

Does time sheet cheating create legal liability?

I am a secretary/bookkeeper for a workers’ compensation attorney. My question concerns a co-worker who sits next to me and for whom I prepare bi-monthly payroll checks. For some time, I’ve noticed that he was cheating on his time sheet. I went to my boss and told him, and he said, “well, XXX often does things for me outside the office.” I told him that time should be on the employee’s time sheet. I would appreciate knowing just what problems my boss might be setting himself up for in a situation like this.

Rita Risser’s Response:

Generally, time sheets are for the benefit of the employer. If your boss is so laid back that he doesn’t care about getting cheated, there’s not much you can do. You are right that if the employee were to come back and claim he worked time that was not on his time sheet, the employer could be liable. The fact that the time sheets are known to be inaccurate would probably mean they would not be admissible as evidence. Thus, the employee could claim he worked hundreds of hours of overtime and you would have no defense.

In some industries, for example, government contracting, time sheets are government documents and time card fraud is a felony.

If your boss, being an attorney, bills his clients for this worker’s time on their cases, and the worker is overstating the amount of time he works, that would be cheating the clients and they would have potential claims against the firm. In fact, since all workers comp billings must be approved by the court, submitting false time sheets might be a felony as well.

What are legal pitfalls of PTO?

We are a California based company with 12 employees and are growing. Our PTO policy is intended to support the diversity of our employees.

Following a 90 propabation period we acrue 16.67 PTO hours per month. We do not observe any holidays and there are no designated sick days.

For those who have not passed their 90 day introductory period, but use PTO that has not been acrued and have terminated employment will have this time deducted from their final paycheck. Is that legal?

Are there any other requirements or guidelines that we should be aware of? Please refer me to any documents that might help us determine whether or not we are in compliance.

Rita Risser’s Response:

This is not an easy question! You may be able to deduct advanced PTO from the final paycheck IF the employee signs an agreement in advance to that effect. What is confusing is the precedent that states that an employer can deduct the amounts due on an installment basis but cannot have a balloon payment deducted from the final check. I recommend, therefore, that for non-exempt (hourly) employees you simply not pay them for that time (that is the purpose of waiting 90 days, after all) and then “gift” them with the PTO after 90 days if you want. With exempt (salaried) employees, be aware that you cannot dock their pay for less than a day’s increment (e.g. if they have a doctor’s appointment, you cannot deduct 4 hours from their pay, but if they are out a day, you can deduct a day).

In California, employees who accrue vacation time must be paid the amount accrued and not used when they leave. If your PTO can be used for vacation, you must pay out the entire amount accrued. Therefore, some employers are distinguishing between vacation and PTO. You can still give the unused PTO as a bonus or gift if it is not used.

Can the company change an employee’s time card?

An employee’s daughter has a baby, and the daughter’s doctor has made it mandatory that the daughter have help at home once he releases her. The employee handbook states that sick leave may be taken if an immediate family member is in need of assistance.

The person doing the payroll, not the employee’s supervisor, said, “You can’t just take 5 days sick leave to go and visit your daughter.” She only allowed the employee 2 days sick leave and the other 3 days as vacation. This was put on her time record without the employee’s approval.

Does an employer have the right to change an employee’s timesheet without their approval after the employee has signed the timesheet? Is there a law protecting the employee in this circumstance? (Montana)

Rita Risser’s response:

Time sheets are required by the Fair Labor Standards Act, a federal law that applies in all states. A time sheet is a legal document, so once you’ve signed it it can’t be changed significantly. However, routine or administrative changes are permissible. It is not unusual for an employer and an employee to have a disagreement about whether to characterize time off as paid or unpaid. However, if the employer is going to change your time card, the change must be consistent with the employer’s policy.

In your case, the policy says you can take sick time to care for a family member. The person in payroll violated that policy by changing the time card. The person in payroll should be disciplined by the company for violating policy. You can’t sue the person in payroll as an individual. If the company refuses to give you back your vacation days, that would be a violation of their own policy, and perhaps grounds for breach of contract. However, keep in mind that in breach of contract cases, your damages if you win are limited to your actual losses, in this case, 3 days vacation pay. There may also be a small administrative fine for the time card violation. It is unlikely that an attorney would want to take such a case, but you may be able to file an administrative claim with the U. S. Department of Labor.

However, I recommend that you try to come to agreement with your co-workers, since your company is so small (less than 50 employees).

Should salaried employees have a PTO ‘bank’ like the non-exempts?

We currently offer 1.6 hours of PTO for every 40 regular hours worked and 40 hours a year for sick time. Should this be tracked in the same way for exempts and non-exempts? Our general manager’s philosophy is that if you get the job done you can have as much time off as you want, but what about if salaried people leave or are out sick for an extended period of time.

Rita Risser’s Response:

Your general manager’s philosophy is an admirable one, as long as employees are in fact getting their jobs done. The problem arises when an employee does abuse sick leave and doesn’t get the job done, and you want to fire them. Documenting poor performance is much more difficult than documenting sick leave abuse.

Most large companies have a sick leave bank for exempts for this reason.

Is it legal to change compensation plans mid-year?

I am a mid level manager in charge of a $4 million, 26 consultant branch in Florida. The public company I am with has changed its compensation quarterly bonus plans 3 times in 7 months since I started in late June of 1996. In August, the plan changed and my 3qtr bonus was 1/3 of what was originally described to me when I was hired. Now starting January 1, they have come up with a new bonus scheme, under which I probably will not get a 1st qtr bonus (or it will be small). And what is worse, I have no guarantee that the comp plan won’t change again. I have heard from other managers that there is a history of changing compensation plans throughout the 5 year history of this company. Are constantly changing compensation plan legal? Is my only recourse to find another job?

Rita Risser’s response:

In Florida, Colorado and a few other states, courts have recognized that applicants have a Right to Know the terms and conditions of employment. A Florida court held that where a hiring manager knew, at the time of the interview, that the company might close the division in 18 months’ time, he had a duty to tell the applicant that.

Your company has a track record of doing this, and I would think that the manager who hired you should have told you about it.

In most states, if the hiring manager made a promise that you would have a certain bonus plan, that promise creates a legally enforceable contract. However, last time I checked (1993) Florida had refused to enforce such promises in employment cases.

You should check with a local attorney to see what your rights are. Whether or not what was done was legal, it seems like a schlocky company that you would do well to leave.

Owner has a cash flow shortage and pays us late — is that legal?

My employer has decided that because of “cash flow shortage” he will delay payroll. The employees receive their paycheck stubs and a partial payment on their paychecks, anywhere from 20% to 40% on the payroll date. The final payments come in bits and pieces for the rest of the month, some paychecks being completely paid 20 to 31 days late. The employees have expressed their “dissatisfaction” in his practices, and the response is “this is how all companies stay in business.” What rights do the employees have?

Rita Risser and Ann Kiernan reply:

This is totally illegal! Pennsylvania law requires employers to pay all wages within 15 days after the end of each pay period. Employees who have not been paid can file a lawsuit, institute criminal charges against the employer, or report the violation to the Department of Labor and Industry, which will pursue the claim for them.

In addition to filing a claim, we would suggest that you find another job fast. This is not how all companies stay in business — this is how some companies go out of business. Good luck!

Do we have to give the raise we promised?

One of our supervisors offered an employee a promotion. The supervisor had approval to quote the dollar figure that she did to the employee. Subsequent to her conversation with the employee, the Board voted to decrease the raise by a third. Are we obligated to pay the employee the amount that the supervisor quoted? The employee believes the law is on her side. Please advise.

Rita Risser responds:

The employee’s argument would be that she had a contract, because the supervisor offered the raise and the employee accepted. However, in order for there to be a valid contract, the employee must have given up something in exchange (what lawyers call consideration or detrimental reliance). For example, if the employee gave up a job with another company that paid more, in reliance upon the promised raise, then the contract would be enforceable. Assuming the employee did not give up anything to accept the promotion, she does not have the right to enforce it, and you do not have to pay her the promised amount.

That is the legal answer. From an employee morale perspective, you still have a problem. From a values perspective, you have an even bigger one. Your Board should never counteract management’s decisions, unless those decisions are illegal, immoral or unethical. In fact, the Board should not be involved at this level of detail in the day to day management of the company. You should figure out a procedure to avoid these problems in the future. And if I were you, I’d go back to the Board and get the original raise authorized.

Good luck!

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