Making flex-time work: 4 keys
February 9, 2009 by Bill MeltzerPosted in: In this week's e-newsletter, Latest News & Views, Work-life programs
Given the choice, some employees would pick flexible job hours over higher pay.
Flex-time programs are a great tool to stretch tight comp budgets. Here are four keys to programs that boost morale and productivity, while avoiding legal pitfalls:
1. Set clear eligibility policy
The less open-ended your eligibility policy the better, says strategic management consultant Bob Denney. Left to their own devices, some supervisors cut side deals with certain employees, causing resentment or, even worse, claims of favoritism.
The solution: Tie flexing directly to productivity goals and the attendance policy. Example: No flexing allowed on a department’s meeting days. By basing eligibility on meeting specific goals, you create measurable and fair guidelines for employees.
2. Use creative alternatives
Many firms limit flexing if it complicates staffing. But there are often creative solutions.
Example: If the CFO is worried about having enough sales reps on duty at peak hours, you may offer telecommuting during those hours.
3. Spell out comp and benefits impact
If some employees will be allowed to work less than full schedules on certain weeks, make sure to mention any impact on other benefits before the firm approves such arrangements.
Example: If a requested flex schedule could significantly affect a 401(k) open enrollment policy based on accrued work hours, bring the issue to the supervisor and employee’s attention sooner rather than later. To ensure FLSA compliance, make sure supervisors and Payroll know that OT rules still apply for non-exempt employees who flex.
4. Benchmark your program
To track program effectiveness, look at yearly absenteeism, turnover and productivity rates as well as employee satisfaction survey results.
February 12th, 2009 at 5:26 pm
I am in a medium-sized construction company (56 ee’s). Question: do you think such a policy can be department-specific or is it best to make it company-wide? Many of our employees are in the field, and have self-imposed flex time due to the peaks and valleys involved in on-site construction work (these people are salaried). One department (not in the field) tried 10-hour, 4-day work weeks (non-exempt employees mostly), but it has now been abandoned. Opinions please!
February 13th, 2009 at 9:55 am
Ruth,
You might try a 9-80 schedule, it works for us. Everyone works four 9 hour days (Monday – Thursday) and 8 hours everyother Friday. So for one week you would work 9, 9, 9, 9 and 8 for 44 hours, the next week they would work 9, 9, 9, 9 for 36 hours, so for the 2 week period you would have your 80 hours. Our employees love having every other Friday off.
February 13th, 2009 at 10:21 am
Thanks, Martha. I have known of employees who worked such a schedule, and it works well for them too. How do you manage overtime though? I need to be prepared for that question before I present this idea to management. Also, is everyone on this schedule at your company non-exempt?
February 13th, 2009 at 11:12 am
Martha, does your organization have paid holidays? If so, how are schedules adjusted during those weeks/pay periods?
February 13th, 2009 at 2:23 pm
Ruth, If they work more than the number of hours necessary for the week they work, that is overtime and paid accordingly. In other words if you work 48 hours and you are only scheduled for 44 the 4 additional hours are at the appropriate OT rate for the classification of either exempt or non-exempt. If you work the 44 hours one week and 40 the next when you were scheduled for 36, the additional hours are at the OT rate. This schedule is used for both our exempt and non-exempt employees and both enjoy the benefits of being off.
Jo, As for holidays, they are paid the number of hours that they would work on that day if it was not a holiday. If the holiday is on Monday – Thursday then they are paid 9 hours for the holiday. If it is a Friday they are paid 8 hours for the holiday. If the holiday falls on their flex day then the Thursday before the Friday is the flex day instead of the Friday. EX. Since the 4th of July is on Saturday the holiday is Friday, if it was your flex friday then you would flex on Thursday rather than Friday.
We have an A Schedule and a B schedule that works well for our company. Of course this year if you are on the A schedule you will make out good for the Thanksgiving and Christmas holidays. Just remember next year the other schedule will have the long week-ends off. This is a great benefit for the employees and I have not heard any unhappy noise regarding the schedule.
February 16th, 2009 at 11:40 am
Martha,
Am I understanding correctly that you are only paying overtime in the first week for hours worked over 44? I am trying to understand how this compliant with the DOL.
February 16th, 2009 at 2:29 pm
JB, No any hours worked in the 2week period that are over the 80 hours is paid overtime. The Friday that the person works, the first 4 hours is for that week the other 4 hours is carred over to the following week to make 80 hours for the 2 week period. 9-80 schedule, in other words you work 80 hours in a 9 day period.
February 17th, 2009 at 12:24 pm
Martha – How does the 9-80 comply with DOL overtime regulations? Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for hours worked in excess of 40 in a workweek of at least one and one-half times their regular rates of pay.
February 17th, 2009 at 2:42 pm
JB, they are paid over time, our system does comply with DOL overtime regs and FLSA. This is very hard to explain with out looking at the timesheets. If you are scheduled for 9 hours and work more than the 9 hours you are paid overtime. We have been using the flex schedule for over two years and have not had any problem in fact I think we would have a riot if we went back to working 5 days a week every week. Everyone loves having the every other friday off.
February 17th, 2009 at 3:25 pm
Just a friendly conversation but I still have a hard time understanding how this complies with federal regulations when you “carry 4 hours over from one pay week to the next”. DOL does not permit hours to be averaged over two or more workweeks. A two week period combined as 80 hours is not a fixed regular workweek. In the week where 48 hours is worked, 8 hours of overtime should be paid. Some states require OT for any hours worked over 8 in a day.
I am sure employees like having every other Friday off. The risk of not paying overtime correctly does not seem worth it from a management perspective. It only takes one employee complaint to potentially launch an audit that would encompass a review of all employees past pay. Is management aware of the penalties and back pay associated with violating overtime pay requirements?
http://www.dol.gov/dol/topic/wages/overtimepay.htm
http://www.dol.gov/esa/whd/regs/compliance/whdfs23.pdf
February 19th, 2009 at 11:35 am
I’ve been keeping up with this thread, and I have to agree with you, JB. I have been audited by the DOL/Wage and Hour division, and it’s not pretty. Part of my corrective action was to ensure that we stuck to our work week, and that all hourly people were aware of it. I had to change my pay cycle as well as pay back wages to ex and current employees. JB, here’s what Martha said: “In other words if you work 48 hours and you are only scheduled for 44 the 4 additional hours are at the appropriate OT rate for the classification of either exempt or non-exempt. If you work the 44 hours one week and 40 the next when you were scheduled for 36, the additional hours are at the OT rate…” Does this mean OT is over 36 one week and over 44 the next week?
I’m glad it works for your company, Martha. But you are right – it is hard to explain without my seeing the timesheets. I guess if it works for your company and the employees are not confused, that’s great! Good luck!
April 17th, 2009 at 2:43 pm
I’m in Calfornia. We have to pay overtime over 8 in a day and over 40 in a week. However, if ou decide to do an alternate workweek, you can do so by department, office or company as a whole IF you announce it early(I think it was 30 days notice), then you have an anonomous vote of all of the hourly employees (salaried don’t get a vote) and if the majority votes yes, it is legal to institute the schedule and NOT pay overtime over 8 in a day. All of the details of this are in the CA Labor Law Digest or talk w/ your attorney. You have to make sure you do it right or you put your firm at risk, but it is possible. We did it one summer – 9 hr days Mon – Thurs w/ Friday off at noon. Employees loved it, but management wasn’t convinced they got their full 9 hours/productivity out of employees. The advice in here about measurable performance criteria is good.
April 30th, 2009 at 6:53 pm
I worked in an organization that had a plan very similar to the one Martha describes. It was a large governmental organization with at least 8 different union contracts, hourly and exempt employees. The way they ‘got around’ the issue of OT in excess of 40 hours per week was to amend the work week schedule. Work weeks began at noon on Friday. If it was your work Friday, the 4 hours before noon were in the first week and the four hours in the afternoon were scheduled in the second week. Rather than referring to it as “carry over” as Martha did, we simply changed the standard work week, which I think is well within DOL regulations.