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Q: I have an exempt employee who would like to earn additional money by working a second, part-time nonexempt job at our company. How do I avoid overtime issues?
A: While employees can perform more than one job for an employer, each employee may have only one Fair Labor Standards Act (FLSA) designation—either exempt or nonexempt. If an employee wishes to work two different jobs, the exemption status must be based on the combination of the jobs’ duties as if the employee were performing one job. When looking at all of the duties of the combined positions, if the “job” still meets the exemption criteria under the FLSA, then the employee may retain his or her exempt status; if not, the employee would lose the exemption status for both jobs and would have to be reclassified as nonexempt for both jobs.
If the combined duties would still qualify the employee to retain exempt status, the FLSA would not require the employer to pay the employee any additional salary above the normal weekly salary. Clearly, not many employees would voluntarily take on a second job without additional compensation, so it is customary that employers allowing such an arrangement would pay an additional hourly, day or piece rate for the hours worked at the second job, but they would not be required to pay overtime.
If the combined duties of the two jobs would no longer allow the employee to retain exempt status, the employee would become nonexempt for both jobs, and overtime would need to be paid on all hours worked in excess of 40 in a week. Some state laws may have daily overtime requirements as well. The basic rate to compute the overtime would be either the weighted average of the two wages or the rate of the job where the overtime was earned. However, some states may have more stringent laws for calculating basic rates for two or more jobs. This could get quite expensive for an employer and would certainly pose an additional administrative burden.
Employers are not required to allow employees to work more than one job for them; employers may choose to allow or prohibit this arrangement and can set their own criteria for doing so, as long as they do not do so in a manner that discriminates against a protected class. Either way, a well-written policy would be advisable.
Q: Must we conduct performance reviews, and, if so, is it acceptable to do them every other year instead of annually?
A:There are no laws that require employers to complete performance reviews for employees at any point during employment. However, performance reviews benefit the employer and the employee, and a formal review should be completed at least annually.
In fact, providing continuous performance feedback to employees is the best business practice. An employee should never be surprised with criticism communicated for the first time in a performance review.
In a company culture that values employee performance, employers should be transparent about the company’s goals and the department’s objectives. Each employee should have written goals and objectives, based on his or her job description, and should understand how performance directly impacts the department and ultimately the company’s overall goals and objectives. Managers should meet with employees at least quarterly for an informal discussion about how each employee’s performance is measuring toward his or her goals and objectives. A more formal written review should then be done twice a year.
This is especially important if you are a pay-for-performance organization. Employees should have a clear line of sight to their individual goals as well as overall company goals and the rewards for meeting and exceeding the goals. Pay-for-performance organizations motivate employees to perform to the best of their abilities. In pay-for-performance organizations, employees who don’t perform to the business’s expectation don’t receive rewards, and employees who perform at or above the expectation receive rewards accordingly.
A written performance review can also help with disciplinary actions when an employee is not meeting goals and objectives. It serves as a written record of the employee’s performance shortfalls, and we all know how important documentation is for disciplinary actions and terminations.
Also, a performance review is not about the structure of the form. Too often, employers get caught up wondering whether the form should be a rated scale, written comments or a combination. First and foremost, the manager should provide clear, objective feedback, based on the employee’s goals and objectives, with specific business-related examples; the structure of the form should be secondary.
—Lesa Albright Scott
Q: We have an employee who suffered a minor injury at work and missed a few days of work as a result. Could we just pay the person for time missed instead of filing a workers’ compensation claim?
A:No. Employers are required by federal and state law to report workplace injuries and can face stiff penalties for noncompliance.
Most employers are required by law to provide workers’ compensation coverage for their workers. Some employers are concerned that reporting too many injuries to their workers’ compensation carrier will affect their insurance and experience rating. Hence, they sometimes consider not filing a claim and paying the employee’s expenses out of pocket. While some minor medical bills could potentially be paid out of pocket, employers are still required by federal and state law to report these injuries. Failure to do so can lead to citations and civil penalties.
When employers do not file a claim with their workers’ compensation carrier, they leave themselves open to the possibility of lawsuits by injured workers, most likely leading to larger expenses for the employer. Workers’ compensation carriers have extensive resources that help manage the care employees receive and that work for both employers and employees in ensuring that workers receive the care they need.
Filing injury reports also helps determine whether other factors were an issue and helps employers remedy any safety concerns, as well as confirm whether the injury was work-related.
Prompt and proper reporting of work-related injuries through the employer’s workers’ compensation carrier protects the employer from future liability and is the best way to protect employees and provide the medical care and benefits needed to return an injured employee to good health and back to work.
Shari Lau, SPHR-CA, GPHR, is manager of SHRM’s HR Knowledge Center. Lesa Albright Scott, SPHR, GPHR, and Angela Stone, SPHR, are HR knowledge advisors in the center.
More from this issueHR Magazine homepage
SHRM web page: HR Knowledge Center
SHRM toolkit: Compensation
SHRM article: Weed False Praise Out of Performance Reviews (SHRM Online Workplace Law Focus Area)
SHRM toolkit: Workers’ Compensation
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