I am the manager of a department of nine, four of whom (including myself) are exempt employees. The exempt staff has, for years, altered their schedules to cover the vacations, absences, and terminations of other staff, both exempt and non-exempt. This has never been a problem before. Two of the exempt staff work five day, eight hour work-weeks, while the other two work four day, ten hour work-weeks.

A few weeks ago, one of the 5/8 employees covered the shift of the 4/10 staffer who went on vacation. The Friday of the second week of the switched schedule coincided with a federal holiday. The employee had already worked the altered shift for that week, but for some reason payroll said that they were not allowed to do that, and switched it to PTO time. I explained to them that, for years, this was the way we worked, and they replied that it didn’t matter. I now have a meeting set with HR next week to discuss this matter and get some long-term guidance, but, somehow, this doesn’t seem right to me.

The individual was assigned to (even though s/he volunteered to take the assignment) a different shift. They worked their expected workload (40 hours) and at least another four hours on top of that. I understand that exempt status is intended to ensure that certain professional roles are carried out properly, irregardless of the time needed to complete them, at a basically fixed rate of pay; but to force someone to take PTO time when they have already altered their shift (at personal inconvenience to them and their family) and have met the required forty hours seems to be an abuse of the exempt status.

Am I off base here?

You are not off base. I’m going to tell you the Evil HR Lady’s First Rule of managing exempt employee time off: Don’t tell anyone what you are doing. Just do it.

I know I’ve just set some micromanagers into serious twitch mode. Your want to give an exempt employee a comp day? Just do it. Don’t tell HR. Don’t tell payroll. Just do it.

But, this doesn’t help you now. Here is what payroll is thinking: Bob is scheduled to work Mon-Friday. He did not work Friday. We did not receive any official paperwork changing Bob’s schedule. Therefore, he must use a PTO day.

Now, why you have to use a PTO day for a Federal holiday is beyond me. It seems like either the company is open (in which case you don’t mention to payroll that Bob didn’t work), or the company is closed (in which case everyone gets it off). But, apparently your company doesn’t work like that.

I’m also going to go out on a limb here and bet that your company requires time cards for exempt employees. I both like and dislike this policy. On the like side, it makes tracking vacation easier and you can also see how many hours your exempt staff is putting in, which can help you evaluate necessary changes to the job. On the other hand, they are exempt for a reason. Let them do their jobs and leave them alone. When it comes down to it, I dislike time tracking for exempt employees more than I like it.

Now, hopefully your HR person will have a clue and she’ll work it out with payroll and Bob will get his PTO day restored. If he doesn’t, this is where you follow the rule I listed above: Just don’t tell anyone.

The next time Bob takes a week off (or a day off, or whatever) just report to payroll that he took one less day then he really did.

Oh dear, I’m encouraging lying, which I say never to do. I think I’m having an ethical problem here. What I’m really saying is that sometimes policy is so stupid that there is only one logical way around it.

To give payroll credit, though. How were they supposed to know that Bob had an arrangement with you? And they have to follow zillions of government imposed rules and no one ever thanks them–they only get yelled at when something goes wrong. And a lot of times, the thing that went “wrong” is actually legally correct, but they get blamed for it. (Like it’s payroll’s fault that the government requires them to garnish your wages for alimony for your soon to be ex-husband who quit his job and ran off with the biker girl that lived next door.)

But, I think HR will be able to straighten it out. I hope. For the record, I would have been able to straighten it out. But, I’ve always worked with rational pay roll people.

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11 thoughts on “Payroll Problems

  1. So … I never comment, and I'm not in HR, and I'm not anywhere near having to deal with these issues.

    But, I had to tell you how much fun it is to read your blog. I think the concept is one of the best ones out there, and I love your sarcasm.

    I just had to go out on a limb and tell you that.


  2. Dear Evil HR Lady,

    Thanks for taking the time to answer my question. Just to provide a touch more info:

    My employer rolled all sick, vacation, and holiday time into PTO time several years back. We provide 24/7 services, so we have no off days, unless we take PTO for them. Also, our company explicity prohibits any comp time for exempt employees.

    Our exempt staff does not punch a timeclock, but we have a computer program that handles our payroll, through which PTO, etc., is handled. As manager, I have to approve everyone's payroll and submit it.

    Again thanks. I'll know more on Monday, and will share if you wish if I find out anything new.

  3. I definitely agree with EHRL – just let him get a "free" day next time he goes on vacation.

  4. Exactly.. your employee will be "working at home" and "checking email" on that day, and as an exempt employee, whether they work a little or a lot, they get paid for the day (no docking rules, and all that)

  5. I like EHRL's idea of just doing it and not saying anything. I do it all the time. I'm an IT Manager and my entire staff is exempt. As an example, 98% of the time if someone needs a half day off, I don't bother w/ the paperwork. But, I only do this for those that put in the time. I have one person who does his 40 hrs and goes home. I tend to not let that person slide. If company policy doesn't allow discretion of its managers, there's an inherent problem there. I understand the 24×7 nature of this person's company but if there's coverage, I don't see the point of binding the manager's hands. Comp time is a reasonable give and take. If more companies were results-oriented instead of watching every move, they'd have less management issues.

  6. I totally agree with you on managers taking the iniative to manage staff vacations as they see fit. My usual statement is "if you ask me again I will deny having this conversation with you… but if time is recorded, we have to manage it as per payroll rules and regulations, if it's off the record you can manage as you see fit". I sometimes get the eye twitch from the manager, but most times I see a lightbulb go on.

  7. I think one of the tests for exempt status is "does the employee get paid for the entire week if they work any part of that week?" (Among other tests.) Payroll can't have it both ways with exempt employees. They can't track them hourly under 40, which appears to be what they want, but then not pay them over 40 (except comp time, but you get my point.) Sometimes employees who would in every other way are exempt can become non-exempt by penalty if a valid complaint is made to the DoL.

  8. I totally agree with the last comment – you can't have it both ways. However, I do understand the problem with your payroll – they're tracking hours, obviously, or they wouldn't be able to deal with having both 10 hour shifts and 8 hour shifts. Why, then, is it a problem.
    I think it might be due to how the computer system deals with schedules – we used a time and labor system like that once, which is pre-programmed with expected shifts. Then, when hours are put in, rules set up by your company apply, which could be what's causing this issue. As you seem to have planned, I'd talk to payroll/HR about this – PC systems shouldn't be running the show.
    I'd also remind them about the danger of tracking exempt employee hours…they're setting up the DOL's case for them by completely undermining exempt status.
    Also, what happens when someone runs out of PTO and only works 38 hours in a week? If they're paying less than the regular salary, you've just made your employee non-exempt.

  9. Hee Hee. After trial and error, and heartburn and hair pulling (my own!), I came to the same conclusion. I have a good payroll person, however her boss is one of those people who makes you jump through hoops for the sake of jumping through hoops. Thankfully, I only have 4 exempt people out of the 24 in my department!

  10. Usually if you're tracking exempt employee hours it's for cost accounting or billing purposes, it has little or nothing to do with payroll. If you're dealing in some areas, like government contracting, you don't have a choice, it's required by contract. Vacation tracking is just a byproduct. Accounting doesn't really care how much time was spent by a given person, it's how much was spent for a particular effort and what did it cost. Putting time into a PTO bucket keeps it off the direct cost of the actual operation, with time off being accounted for in a separate fringe cost.

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