April 17, 2009

OT on PTO??

Of all the assinine questions I have received, this by far takes the cake...

Regarding overtime - do you pay overtime for hours "actually worked" or do you include paid vacation, holidays, etc. (time not actually worked) in your overtime calculation?

It would be so nice if each of us lived in "Perfect" where we received overtime pay when we didn't actually even work overtime. But, we don't live in "Perfect", do we? No, we live in the land of "Reality" and reality says that overtime pay is just that...OVERTIME PAY. If you didn't actually "work" 40 hours in the week (or 8 in a day in CA), then why in the world am I, as an organization, going to shell out an additional 50% of your pay? That just doesn't make much financial sense, now does it? Now, I will say that companies do handle this differently and how OT is paid is partially determined by company policy. But, let us not forget that all that is required, by law, is that the employee be paid overtime for all hours "worked" over 40 in a week (or 8 in a day in CA). I have seem some companies who thought they were based in the land of "Perfect" go above and beyond what is required and pay OT based on any hours within the week, such as PTO time used within the week. This is fine (and o, how I wish I worked there), as long as it is documented as a policy and is conspiciously known to all employees and is also applied to all employees.

Bottom line? As long as you comply with the requirements of the law, you should be fine.

Holiday Pay for Exempt Workers

Here is a very interesting question that I received about holiday pay and exempt employees...

Our company has a strict policy against calling out the day before or after a holiday. If an employee calls out on either of those days, they do not receive pay for the holiday. We have an exempt employee that called out the day after Thanksgiving. Can anyone tell me if we are required by law to pay him for the holiday because he is exempt? From the research I have done, I cannot find any conclusive answers.

First of all, how dare you not give your employees off the day after Thanksgiving. I don't know a soul alive that can effectively work with turkey day syndrome. I mean the stuffing and cranberry sauce effect is bad enough, but you expect them to come to work after eating a whole half of turkey too!!?? Shame on you!!

Now that that's out of the way, let's get down to brass tacks. There is no law, written or otherwise that states that you have to pay for holiday pay...period! It's great that your company falls in with the 90 percentile of other companies that take pity on their employees and gives them some duly needed time off of work to worship, frollick, and otherwise enjoy their family without the contraints of the office. But, and listen close, because I will only say this one more time...You are not required to pay this worker for the holiday. You have a clearly stated policy (so you say) that stipulates that workers WILL NOT be paid for the holiday if they do not work the day before and the day after the holiday. Who cares that he was exempt? Does your "clearly stated" policy say "as long as you are not exempt"? I didn't think so. Don't pay the worker, and if he complains, remind him of the policy and show him where he signed his understanding if the policy. You did make him sign some kind of aknowledgement, right? Good...thought so.

Now, get back to work and stop goofing off sending me emails!

Regional Compensation Structure Query

I received the following question regarding regional pay structures today...

My company is considering implementing a new pay structure. We have employees in various locations; Should I put all of their jobs into one salary structure? Or, should I have multiple structures for each different geographic region or city? Or, should we add a premium to jobs for being in a specific geographic region?

While I am in no way a compensation expert, nor do I claim to be, I do don the hat every now and again. In my very varied experience, I have handled geographic salaries in a number of different ways. I have worked for companies whose salary structures ran the gamut to being steady across the board to having each location "create" their own comp structures based on their individual regional markets. Both of these scenarios can create potential problems. With the former, you have workers that can be either grossly over or under paid based on their relevant marker. With the latter, you have roughshod comp practices with no consistent, and oft times, no oversight.

One good solution would be to create an overall pay structure based on the cost allocation of the job and to include a "premium" if you will for the cost of living difference, based on the market index. The COLA is added as a percentage to the overall pay structure for that position for whichever region the position is in. On the flip side though, we do not generally adjust down for regions in which the cost of living is lower than the corporate pay structure. You would need to price the job first, and this, of course, comes with it's own set of challenges, as numerous pricing structures exist. You would have to choose the one that is right for your organization.

Again, I have to reiterate that I am by far, NOT a comp expert, but I certainly hope that my advice has alleviated your stress in some way.

April 15, 2009

Why Do I Need an RPO?

I received the following question recently in regards to RPO firms (A.K.A ~ PEO Firms)...

I have a question related to RPO: How recruitment consultants search a candidate? eg. Recruitment Consultancy have to search candidates having skills: C++\Linux with 2+ experience. Now what plan they follow to search candidate from different job portals (like monsters, naukri, timesjob etc.), networking sites (like orkut, linkedin etc.), local database and other resources as its a very time consuming process.

I think this question has a lot of hidden questions as well but I will try to answer your most basic question... Also, for those less than educated about what an RPO is and what they do, let me also provide some basic ackground information...

A Recruitment Process Outsourcing (RPO) firm does pull from the same pool of candidates as sites such as Monster, Careerbuilder, and Hotjobs, for the most part. The difference is that, most RPO firms act as extensions to their clients with a seemless process for recruitment. This means that the recruiters from the RPO firm generally have the client's email address as their own, they use the same systems, they state to prospective candidates that they are from the client's company or are acting as an agent for the client, and they typically follow the same recruitments guidelines as the client.

To the candidate, there is no difference between the RPO firm's recruiter and the client's recruiter, hence the seemlessness of it all. A company would choose to use an RPO firm for ramp up staffing, where their own recruitment team can not handle the level of recruiting necessary, or when a small company does not have the need or resources for full time in-house recruiters...to name a few examples. But to really answer your question, while RPO firms do pull from the same candidate pool, most "good" RPO firms will have an internal database of contacts they have screened and will also engage in passive recruitment and networking (through social media sites like Twitter, LinkedIn, Facebook, etc) to gain additional potential candidates. These passive recruitment tactics are practices that are not done a lot by in-house recruiters in most client companies because the recruiters either do not have the time (due to adminstative tasks or high requisition load), do not have the ability passively recruit, or because the organization has not blazed into the 21st Century and figured out the social network recruiting is the recruitment of, not the future, but now. Since specialized recruiting and client development is the core of the RPO firm, they tend to be experts in passive recruiting and networking.

RPOSource has great resources on their site. It may be worth checking out...