Tag: compensation

Working Hours

Nonexempt employees are paid for all hours they perform work.  That’s it, right?  Of course that’d be much too easy.  Are you allowed to pay them only for the time that they are working?  What about waiting, rest periods or even some travel time?  The FLSA requires you to pay nonexempt employees for all of this.  Here are a couple of issues that will hopefully guide you in determining mandatory compensation for hours worked.

The Supreme Court provided the definition for working hours adopted by the FLSA regulations in its long-standing decision Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U.S. 590 (1944). In that case, the Court determined that working hours include all time during which a nonexempt employee is engaged in physical or mental exertion controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and its business. (See 29 C.F.R. §785.7.) In addition, the time an employee spends after clocking in, getting to his job, and preparing for it generally should be paid. However, the time which the employee spends waiting, just because he arrived early, is not.

As a general rule, employers do not have to pay for any time before and after the employee’s “principal activity” unless there is a contract, custom, or practice requiring pay for these preliminary and concluding activities. However, time spent by employees in activities before or after the regular workday must be counted as time worked if the activities are an integral and indispensable part of the employee’s principal activities. (See 29 C.F.R. §785.9.) Working hours also may include time when the employee does not actually perform any work but is engaged to wait.

As is the case in many FLSA issues, your requirement to pay for ‘waiting time’ depends on some key points. According to the FLSA regulations, “facts may show that the employee was engaged to wait or they may show that he waited to be engaged. Such questions must be determined in accordance with common sense and the general concept of work or employment.” (See 29 C.F.R. §785.14.) The regulations generally distinguish between on duty time, off duty time, and on call time.

On-Duty Time: Where waiting is an engrained in the basic nature of the job, time spent waiting is compensable work time.  Where an employee cannot use the time effectively as personal time is another way to look at on duty waiting time that is compensable.

Off-Duty Time: An employee is considered to be off duty during periods when he is “completely relieved from duty and which are long enough to enable him to use the time effectively for his own purposes.” An employee is not completely relieved from duty unless he is told in advance he may leave the job and that he will not have to begin work until a specified hour has arrived.

On-Call Time: An employee who is required to remain on call on the employer’s premises is working while on call and must be paid for that time. In addition, an employee who must remain on call so close to the employer’s premises that he cannot use the time effectively for his own purposes is also working while on call.

Though a concept like ‘working hours’ seems to be generally accepted by many as the hours that we’re at work, the exceptions can become very granular in their specificity.  We, at HRInsights strive to make our members aware of these exceptions to FLSA and other laws that encompass HR compliancy.

Money Makers Through People Management

All good businesses seek ways to improve efficiencies and GREAT businesses seek efficiencies through effective people management.  Yes, you can be profitable and even “successful” without a true people-focus, but you will never realize the organization’s true full potential unless you effectively manage the people aspect of your business.   Being people-focused isn’t a feel-good, nice-to-have core value, but an actual business strategy that is well thought out, customized to fit your business and brings real value to your bottom-line AND top-line.  When you truly have the realization that people make a difference, you will invest significantly in your people just as you do for marketing, sales strategy and technology.  You must have consistent investment, policies, programs and process.

Every business should consider the HR basics below as they plan and prioritize their people initiatives.  Well planned and implemented HR practices, processes and programs will enable your organization to realize its full potential.

Top 10 Money Makers and Savers For Small Businesses Through People Management

1.  Standardize your hiring process.

2.  Implement a performance management system.

3.  Develop and distribute an employee handbook.

4.  Create an employee communications program.

5.  Reduce use of legal counsel for basic workplace questions and issues.

6.  Hire HR experts (consultants or employees) to design HR programs.

7.  Appropriately document programs, issues and actions

8.  Implement salary structures tied to job levels and performance.

10. Develop and document basic human resource policies and practices.

Have you reached your potential?

Governor Christie, Leadership and Sacrifice

During a recent town hall meeting, New Jersey’s Governor Chris Christie recently responded to a teacher’s question about his efforts to address the financial difficulties facing the state’s educational system and his battle with the teacher’s union. The video of their interaction is included below:

In the video, Governor Christie cites that NJ teachers contribute nothing to the cost of their healthcare benefits. A hundred percent of the cost is covered by the taxpayers not only during their time as teachers but, if they attain tenure, for their lifetime. Working with an enormous deficit, Christie was requesting the teachers contribute 1.5% of their pay to offset some of the costs of their benefits, on average, $750 per year. Additionally, he requested that the union freeze salaries for one year (there is a provision guaranteeing 4.9% increases each year). If these items were adopted, minor teacher layoffs would be required and result in ~$700M in savings. The union did not support these programs and many more teachers were let go.

Looking at these proposals from a business perspective and in our current economic client, they seem extremely reasonable. Where is the shared sacrifice? Building a profitable company is a difficult task. There are often times when sacrifice is required on many fronts. Making sacrifices can mean the difference between survival and closing the doors. Employees who cling to entitlement cannot be tolerated. And in these difficult situations, strong leadership is critical. Christie demonstrated the directness and clarity that are needed from a leader. He’s candid and clear. His reaction to the teacher’s eyerolling was beautiful. He doesn’t ignore it. He calls it out. Let’s have some mutual respect. Leadership is about straight talk and honesty. Articulate the problem, the action, the benefits and the consequences. Listen. Take the heat.

And if you have a compensation program that provides employees a 5% increase every year and no matter how they perform or what they contribute to your business, I would love to know why.

Happy 35th Anniversary!


Last Friday, I attended a dinner for one of my wife’s colleagues who was celebrating his 35th year with the company. It was a festive occasion with great food, drink, and stories (and the Blackhawks’ game was on the big screen).  The longevity of the celebrant’s career is something to behold. Why does someone stay with a company for 35 years? Why do we (my longest tenure with a company was 10 years) leave? Some reasons (in random order):

I stay with a company for 35 years because:

  • They treat me right
  • The pay is great
  • The office is 10 minutes from my house
  • They challenge me
  • They are growing and there is great potential
  • All my friends work there
  • I’m comfortable (I’m afraid of change)
  • I get a company car
  • The bigger we get the easier it is to hide
  • It is fun
  • I learn new things
  • I believe in the company’s mission
  • I don’t know how to find something else
  • I own it

I left before ever thinking about 35 years because:

  • I got fired
  • I had a great new opportunity (it was)
  • I had a great new opportunity (it wasn’t)
  • My boss was a bastard
  • I got passed over for a promotion (and should have been)
  • I got passed over for a promotion (and shouldn’t have been)
  • I died
  • The new company had a better commission plan
  • I have ADD
  • I started my own business
  • The company was in trouble
  • Someone else reminded me how valuable I was
  • I needed better work/life balance
  • I didn’t believe in what the company was trying to do anymore
  • I went back to school
  • I just needed a change

Under the right circumstances, 35 years of employment with one company can be a beautiful thing for both the individual and the business. While I believe this kind of longevity (some might say loyalty or attachment) is near extinction with Gen Y (maybe even Gen X), it was nice to celebrate the accomplishment with my wife’s colleague. What are you thoughts? Any reasons to add to the list?