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Our company provides a Christmas Bonus for hourly employees in some departments. For this bonus, all eligible employees have $0.10 per hour clocked held from their check. Then, in December, they are given the money held and the company matches that amount.

Here's where the confusion comes in. One of our more unfortunate managers decided that his employees should not have to pay their part of the Christmas bonus, so he pays them $0.10 more per hour over what he would normally pay them, thus making the business pay for both halves of their Christmas bonus (i.e. an employee is paid $15.10, instead of $15.00). Now we are correcting it whenever an employee comes up for review, but they are not all being reviewed at once. However, our Human Resource Manager thinks that the .10 extra on these employees counts as a separate benefit, and if removed from one employee, it must be removed from all.

So, does this 10 cents/hr count as a separate benefit?

2007-12-18 05:38:12 · 4 answers · asked by Godot 2 in Politics & Government Law & Ethics

Please include sources, if possible.

2007-12-18 06:00:55 · update #1

4 answers

It's not a separate benefit at all, it's just a pay raise. The manager gave his employees a $0.10 an hour raise. You can take it away from them at any time - annual review or not - but you must pay it for the hours they already worked.

No law requires a company to make pay raise / pay reduction decisions across the board. It's perfectly legal to make the pay reductions at the time each employee comes up for review. It would also be legal to make them all tomorrow.

As a follow up - I hope that;
a) All your employees have signed a WRITTEN agreement to allow you to withhold the $0.10/hr for the bonus plan.
b) Participation is 100% voluntary and any employees have a right to NOT have the $0.10 withheld if they don't want to.

If not, you're violating the law on witholdings.

Richard

2007-12-18 05:50:31 · answer #1 · answered by rickinnocal 7 · 2 0

the issue is between the company and the manager if he has the authority to set pay scale in his department then he has the authority end of discussion. if he does not have the authority to set pay scale then he violated a policy and should answer for it. the hourly employees can not be held responsible for the mangers decisions about their hourly pay. if the company wants to change their pay rate they have the right to do that but they can not do it retroactively and if HR is involved as you stated they know that. if an HR manger does not know what a benefit is they should not be in the position to be judging such decisions. when evaluations are done for merit increases this issue can be addressed but if the manager has the power to set pay rates in his department then they can just do it again next year. it is this manager who needs to be dealt with or this issue will cause problems between departments as employees find out about it as i would guess is why you are asking his question now on YA instead of actually looking into it thru appropriate channels.

EDIT:
Richard is absolutely correct with his statements in his follow up.

2007-12-18 05:57:53 · answer #2 · answered by michr 7 · 1 1

No, it is not a separate benefit. It is deferred income. If they are going to change it for all employees, the change should occur universally at the same time. Otherwise, employees are being denied their current right to full wages.

** Note: This answer has not created an attorney-client relationship. This is a general discussion of the subject matter of your question and not legal advice. Local laws or your particular situation may change the general rules. For a specific answer to your question you should consult legal counsel with whom you can discuss all the facts of your case. **

2007-12-18 05:42:39 · answer #3 · answered by scottclear 6 · 0 2

Well: he pays them $0.10 more per hour over what he would normally pay them. He's a manager; that's his right. He's responsible for his department costs; if what he is paying employees is acceptable, his reasons are irrelevant.

2007-12-18 05:46:58 · answer #4 · answered by wizjp 7 · 1 1

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