A Twist on Forced Vacation for Exempt EEs

[partiallypeeved]

What is the name of your state? WI

I am an Exempt (salaried) employee for a consulting firm. I do contract work at my clients' offices, record my time on a daily basis, and submit my timesheet to the consulting firm on a weekly basis.

On a typical, five-day work week, I had been required to "back-fill" my weekly hours with Vacation time whenever I did not bill at least 40 hours to the Client. The work flow on my current long-term engagement is such that there is a busy time of the month and a not-so-busy time. This can result in billing 38.25 hours one week, and 46.75 hours the next (for instance). In this example, I would be forced to use 1.75 hours of Vacation for that first week - but would receive no benefit for working 6.75 "extra" hours the following week. I wasn't crazy about losing the Vacation time - especially because it was the Client's workflow that dictated my shortfall in billable hours - but I lived with it.

But then, some time last year, my employer decided to change the way they administrated vacation time. The standard of 40 billable hours per week became 8.0 hours per day, and they began taking partial-day deductions from my Vacation Hours balance on days where I billed less than 8.0 hours. I could bill 43.5 hours in a week, but if it broke down to 9.0 hours each day from Monday through Thursday, and 7.5 hours on Friday, I was forced to use 0.5 hours of Vacation time.

Clearly, this stinks - but is it legal? From what I have read, ERs are legally allowed to force the use of partial-day Vacation Time by Exempt EEs, and that it's only when they start deducting Salary, do they risk blowing up an EE's Exempt status.

But what if the partial-day absence is not of the EE's choosing, rather, it's due to the Client's work flow? Should I have defrauded the Client by billing 8.0 hours for that Friday? Should I have lied on my timesheet by allocating a half-hour of my time from Thursday to Friday? Does the legality of forced partial-day vacation for Exempt EEs apply to this scenario the same way it does to going home early with the sniffles or taking a long lunch?

A second scenario relates to Admin time. The consulting firm required me to attend an introductory meeting with my new Director. The meeting took three hours (including travel time). That time was in addition to the 7.0 hours that I billed to the Client that day. Even though I worked 10.0 hours on company business that day, I was forced to use 1.0 hour of Vacation time because only 7.0 hours of my 10.0 hours were billable. Again, this took place during a week in which I billed more than 40.0 hours to the Client. Legal or no? Am I still Exempt?

...(For those keeping score, between late-May and mid-September (when I finally decided to start lying on my timesheets), I lost 26.75 hours of Vacation time to these partial-day Vacation deductions. Over that same 17-week span, I also billed 32.5 "extra" hours. So the consulting firm gets the benefit of billing (what amounts to) 56.5 hours of "extra" revenue (32.5 + 24.0 hours for the three days of vacation I won't be able to take later in the year), and I get zilch)...

Finally, this isn't a partial-day Vacation issue, but it is another instance of forced Vacation that I question. My company does not recognize Good Friday as a Holiday. However, the Client does, and their offices were closed on Good Friday. With the option of working at the Client's office not available, I offered to come in to work at the Corporate Office that day ("Bench time" in my line of work). The Corporate Office didn't have any use for me that Friday, so I was forced to use a full day of Vacation time.

Can the consulting firm force me - as an Exempt EE - to use a full day of Vacation when 1) I make myself available for work, 2) work is not available? The time off was not of my choosing.

Anyway, I realize that I probably could have asked three questions in three separate threads, but my guess is that the same principles will be in play with each scenario. Thank you, in advance, for any insights any of you can give me on this frustrating practice of forced vacation as it relates to me and my ER.What is the name of your state?

 

[ecmst12]

Best to keep all your related questions in one thread. Unfortunately I don't have any answers for you, but check back tomorrow, I'm sure others will

 

[cbg]

Nothing in the law says you have to request the use of vacation time for partial day absences. It is perfectly legal for the employer to require it. If you didn't work the entire day, for WHATEVER reason, it is legal for the employer to apply vacation to the absence.

It is also legal for them to require the use of vacation time to a day when you did not work at all, even if you worked over 40 hours in the week and even if it was entirely the employer's idea that you not work.

Nothing you have posted indicates a violation of the law or a revocation of your exempt status.

Lying on your timesheets can get you fired.

 

[pattytx]

Personally (having been an exempt consultant, billing out time to clients), I think it stinks. Do with that what you will.

 

[partiallypeeved]

Nothing in the law says you have to request the use of vacation time for partial day absences. It is perfectly legal for the employer to require it. If you didn't work the entire day, for WHATEVER reason, it is legal for the employer to apply vacation to the absence.

It is also legal for them to require the use of vacation time to a day when you did not work at all, even if you worked over 40 hours in the week and even if it was entirely the employer's idea that you not work.

Nothing you have posted indicates a violation of the law or a revocation of your exempt status.

Lying on your timesheets can get you fired.

Thanks for the reply, cbg. One follow-up question for you:

I suspected I was out of luck under the first scenario (forced partial-day vacation for less than 8.0 hours worked). But just so my understanding is clear, does the first paragraph in your answer also apply to the second scenario where I worked more than 40 hours during the week and I worked 10 hours on the day in question - however, only 7 of those hours were billable, so I was forced to use an hour of vacation?

One clarification about lying on my timesheets as a work-around: I guess I have justified it in my own mind because I am "only" lying to my employer about the daily allocation of my hours - not lying about the quantity of my hours where it would result in additional charges to the Client.

I ended up talking to the Client (I've been on the same long-term engagement throughout this process) and we worked out an agreement.

Basically, for 0.0 - 39.75 hours, I bill my actual hours in 8.0 hour increments and backfill my reported time with Vacation hours. For 40.0 - 168 hours, I bill 40 hours in 8.0 hour increments - no overtime.

Since I am not defrauding or causing harm to the Client, the only thing I could see getting fired for is under-reporting my billable time. I guess I can live with that.

Anyway, thanks again for the response.

 

[partiallypeeved]

Personally (having been an exempt consultant, billing out time to clients), I think it stinks. Do with that what you will.

I guess this just serves as another example that "legal" doesn't always mean "fair".

 

[pattytx]

I worked more than 40 hours during the week and I worked 10 hours on the day in question - however, only 7 of those hours were billable, so I was forced to use an hour of vacation?

As rotten as it sounds, I don't know of any law prohibiting it.

Since I am not defrauding or causing harm to the Client, the only thing I could see getting fired for is under-reporting my billable time.

Yeah, you could. You're underreporting your billable time and, as a result, your employer is losing revenue. Also, the contract is between your employer and the client company. I'd bet that your agreement with the employer is such that it prohibits you from making "side deals" with the client company, unbeknownst to your employer; and if it doesn't it should.

Are you sure you want to have to explain that firing to the UI agency when the employer protests your unemployment claim or to a prospective employer when you're out searching for another job?

"Two wrongs don't make a right."

 

[TinkerBelleLuvr]

source:
http://www.dwd.state.wi.us/er/labor_standards_bureau/publication_erd_13109_p.htm#2 Which

Any employee can be paid on any basis – salary, hourly, commission, piece-rate, flat rate as long as they receive minimum wage for all hours worked in the pay period, and as long as overtime is paid when required . Overtime is usually required at time and one-half the regular rate of pay for hours worked in excess of 40 in a week. There is a provision in the overtime regulations ( Chapter DWD 274, Wisconsin Administrative Code) that “exempts” employees whose primary duty is administrative, executive, or professional work from overtime requirements. One of the requirements for each of these types of work to meet the exemption is that they are paid on a salary basis.

The means they can't treat you like an hourly employee.

Can the employer deduct from salary for partial days of absence?
No. Deductions may not be made for partial days of absence, regardless of the reason.

Can the employer prorate the employee’s salary when the business is shut down for part of a week due to a holiday or for another reason? What about when the business closes for a full week?
If work is not made available to employees paid on a salary basis for part of a workweek, the employer may not reduce the week’s salary. If work is not made available for an entire workweek, however, no salary needs to be paid.

All from the Wisconsin Department of Labor

 

[cbg]

I completely agree that your employer is being petty, to say the least, but yes, they may legally require an hour of vacation time if only 7 hours are billable.

Ginny, the problem here is that neither Federal nor state DOL cares what "bucket" the pay comes from. As long as the dollars in the paycheck are not shorted, the employer is legal. The US DOL has taken the position that use of vacation pay is a matter of company policy between the employer and employee and none of their concern. And while a state could make a law more favorable to the employee than that, only CA has even considered doing so, and CA's laws on the subject are unclear at best.

 

[moburkes]

But, Ginny, they're not.

 

[TinkerBelleLuvr]

The problem is that they are treating him as an hourly employee rather than an exempt employee. The company can require that he keep an accurate time-sheet. I don't disagree with that. What they cannot do is 'dock' him when he doesn't 'bill' 8 hours. He 'worked' 10. That's where the DOL will find problems.

 

[moburkes]

The problem is that they are treating him as an hourly employee rather than an exempt employee. The company can require that he keep an accurate time-sheet. I don't disagree with that. What they cannot do is 'dock' him when he doesn't 'bill' 8 hours. He 'worked' 10. That's where the DOL will find problems.

They didn't dock him. He gets paid the full salary. They just used some of his vacation time for the hours that he didn't work, which is legal in all 50 states.

 

[ecmst12]

Right, it would only be illegal if he ran out of vacation time and they started deducting money from his checks.

 

[TinkerBelleLuvr]

A second scenario relates to Admin time. The consulting firm required me to attend an introductory meeting with my new Director. The meeting took three hours (including travel time). That time was in addition to the 7.0 hours that I billed to the Client that day. Even though I worked 10.0 hours on company business that day, I was forced to use 1.0 hour of Vacation time because only 7.0 hours of my 10.0 hours were billable. Again, this took place during a week in which I billed more than 40.0 hours to the Client. Legal or no? Am I still Exempt?

That is what I take exception to.

 

[TinkerBelleLuvr]

OP - exactly what kind of work do you do on a consulting basis? This is where it gets VERY sticky.