Paying salary

Discussion in 'Business Operations' started by sven1277, Mar 11, 2011.

  1. sven1277

    sven1277 LawnSite Senior Member
    Posts: 635

    I have 2 employees I am considering paying salary instead of hourly. They are both good employees. Both have been with me for a year and indicate sticking around for some time.Its tough in the winter for them. They collect unemployment and I pay them cash for snowplowing. But the lack of full time work is hard. I like it because the paycheck is the same each period. No overtime. My wife has concerns that they won't have an incentive to work as hard. I think they will appreciate the income in the winter. I had one employee in the past who was salary. I think it worked well. I had to learn not to overwork him, however and I am more aware of that now. I was going to check their earnings over last year and see what it worked out to.What are your thoughts?
     
  2. Kelly's Landscaping

    Kelly's Landscaping LawnSite Platinum Member
    Posts: 4,276

    I tried this once it was the employees idea id say it worked well for about 6 to 8 weeks. Then came the delusions where the employee claimed he worked a hundred hours a week. Basically friends and family put ideas in his head and he went down hill fast by mid summer he was working 2 to 3 days a week yet collecting his full salary. And still felt he was getting ripped off fall came I fired him he talked his way back but demanded hourly I jumped at it. And sure enough the 3 more weeks he worked his biggest check was 23 hours so much for his tons of overtime.

    Now I only have 2 guys on salary myself and my partner the guys often make more with overtime. Personally I feel we get screwed employees of season professions either ought to get overtime or unemployment but not both. Or at the least they should cut the overtime rate its only purpose was to lower unemployment by making it painful to employers to not hire more employees rather then let your current ones take the hours. That's fine but for seasonal workers spring requires significantly more hours then later so extra employees would find lack of work later. Bottom line its a poorly thought out system and I doubt it will change soon.
     
  3. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Dept. of labor has pretty strict guidelines on salaried wages. You can potentially set yourself up for DOL audit and subject to fines, penalties and back overtime pay. All it takes is a disgruntled employee to file a complaint.
     
  4. ncknaklawns

    ncknaklawns LawnSite Senior Member
    from NY
    Posts: 379

    If what is working-keep doing it. If you want to give them more raise their pay.
     
  5. DanaMac

    DanaMac LawnSite Fanatic
    Posts: 13,156

    I have one employee on a nine month salary from April 1 to December 31. We are basically shut down from about Dec. 1 to April 1, but I keep him on a few hours in Dec. to do shop and vehicle stuff. He then collects unemployment from Jan 1 to March 31.

    The salary idea was thrown out to him because of a couple reasons, but mainly it would give him a steady consistent check for nine months. We tend to slow down in August and September which limited his hours a little bit. No more highs and lows check to check, same amount every two weeks. He still works plenty of hours when needed, and gets hours off when it is slow. Not everybody can appreciate or understand the salary concept, and they can completely abuse it. But then again, people also abuse the hourly plan as well. It's all in who you hire.
     
  6. XLS

    XLS LawnSite Silver Member
    Posts: 2,038

    what we do is get our guys to sign a Labor holding concent fourm stating they are aware and agree that any and ALL overtime will be paid at the end of the year starting Jan-1 and being paid out untill March 15 of the following year . we also tack of 4.00 an hour worked durring the year to go toward paying in the winter so a person works 1000 hours @ his weekly of 18.00 he makes 18,000.00 for his seasonal work and come winter he has $4,000.00 for winter pay to make it 2 poor months to keep him around. also keep in mind at a factory job over 40 is OT but the employee will work 2080 hours reguardless, if its in the agreement for your guys then untill 2080 hours are met NO overtime will be billed and they sign it then it wont really matter. just an idea
     
  7. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Overtime is based on a 7 consecutive day period.
     
  8. XLS

    XLS LawnSite Silver Member
    Posts: 2,038

    read it agian I never said it wasnt i said if they agree to it and sign it it covers my tail . we simply log the hours and turn them in at a later date in the year to give them a 40 hour week for all year
     
  9. snomaha

    snomaha LawnSite Senior Member
    from midwest
    Posts: 871

    Not an expert but have been through a DOL wage and hour audit - We were told that overtime is due at the end of the pay period and can not be held by the employer for future distribution.

    Just my two cents. Thumbs Up
     
  10. Fvstringpicker

    Fvstringpicker LawnSite Fanatic
    Posts: 7,596

    I am an expert snomaha and you're essentially correct. So XLS I'd make sure what you're doing is ok. Employees can't sign away their rights prescribed by law. Oftentimes folks think they're covering their butts until a judge and maybe a jury explains it to them.
     

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