Don’t link vacation bonus to exempt workers’ hours — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Don’t link vacation bonus to exempt workers’ hours

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in Employment Law,Human Resources

Q. Can we give an exempt employee extra vacation days in addition to the standard accrued time off outlined in our employee handbook? —T. L., Maryland

A. Yes, you can reward exempt employees with extra time off; just be careful how you structure it. Don't create the impression that you base the vacation bonuses on an hour-for-hour allotment. That could make it appear you're compensating exempt employees on an hourly basis, which could jeopardize their exempt status.

Although several federal courts have said that paying extra on an hourly basis doesn't automatically destroy the exemption, the safer approach is to stay away from an hour-for-hour payment. Instead, offer the additional time off as a bonus or appreciation reward that's unrelated to time worked.

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