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While Salary Increases Were Lowest in 33 Years, Variable Pay Awards Reached an All Time High in 2009, Hewitt Study Finds
While the economic downturn prompted U.S. companies in 2009 to grant employees the lowest base salary increases in 33 years, funding for variable pay was at an all time high, according to a recent survey by Hewitt Associates, a global human resources consulting and outsourcing company. For 2010, employees can expect to see a similar mix of compensation payouts, with variable pay budgets projected to remain stable and base salary increases rising only slightly.
To read the entire press release go to Hewitt Associates’ website.
Holladay v. Burch, Oxner, Seale Co., CPA’s, PA
In this FLSA case, the parties cross-moved for summary judgment, regarding the applicability of the professional exemption. It was not disputed that Plaintiff was an accountant, who performed exempt duties. The sole issue before the Court was whether Plaintiff received at least $455.00 per week on a salary basis.
Plaintiff stated that the amount she was paid was based on an hourly rate computed by dividing the total estimated compensation by 2300, the expected hours worked per year. She took the position in her brief that the firm’s pay scheme was based on an expectation that she would work 44.23 hours per week (based on 2300 hours divided by 52 weeks) and that her guaranteed wages compute to 32.31 hours per week (for 2006).
The parties did not dispute that the Plaintiff was working in a professional capacity and that she received at least $455 per week in compensation. However, the Plaintiff contended that her status as an exempt salaried employee was lost as a matter of law since her pay was in fact calculated on an hourly basis and that her guaranteed pay did not bear a reasonable relationship to her actual earnings for her normal workweek as set forth in 29 C.F.R. 541.604(b). Defendant contended that the Plaintiff retained her exempt status as a matter of law and that her method of pay placed her under subsection (a) of 541.604.
In denying both parties’ motions for summary judgment, after a lengthy discussion of the issue presented—hourly vs. salary basis – the Court determined it was a question of fact whether the guaranteed salary amount paid to the plaintiff was for forty (40) hours (the normal workweek) or for only 32.31 hours (for example, in 2006) as the plaintiff suggests. The Court further explained, If the jury determined the guaranteed salary amount was for a normal workweek (i.e., 40 hours) then the defendant would not have lost the exemption and the plaintiff could not recover. However, if the jury determined the guaranteed amount was in fact for fewer hours than a normal workweek of forty (40) hours, such as 32.31 hours as Plaintiff contends for 2006, then the exemption is lost and the plaintiff would be entitled to damages. The jury would determine the number of overtime hours, the hourly rate of pay for each period, as well as wilfulness. The Court would then make the mathematical calculations. After reviewing the record submitted, the Court is simply unable to make a ruling as a matter of law for either party on the issue of whether the plaintiff is an exempt employee without additional factual findings. See, e.g., Archuleta v. Wal-Mart Stores, Inc., 543 F.3d 1226, 1236 (10th Cir.2008); Davis v. Lenox Hill Hospital, 2004 WL 1926087 (S.D.N.Y.2004).