I know how we all like to bash on HR here, myself included. But I find myself in a situation where I need some advice.

I'm working on a government contract that invokes FARs regarding payment and compensation. The situation is I'm working full time plus. Every hour I work on the contract is billable. The short question is, if my company bills for my time, are they obligated to pay me for all of it?

The company just came out with a new policy that states all "Exempt" workers (I fall in that category, no question) will receive only their salary, and not be compensated for extra work. To date, I have been compensated for my billable hours at straight time over 80 hours per two week pay period. Now, policy is to compensate me for 80 hours per two week time period regardless how many billable hours I work.

I know it can get complex if I bill to multiple contracts, but that's not my case. 100% of my billable hours are to the same contract.

The research I've done says a definite maybe. One link said a court upheld the position my company is taking.
I know the ethical answer. I am looking for a legal answer.

Thanks in advance!

So why can't you work 80 hours every two weeks? At 80 hours, clock out and leave. Don't work if you don't get paid?

If everything falls to shit, I'd say that's a pretty convincing argument to the superiors to put it back to the way it was.

Well, I can and do. My issue is when my manager asks me to work overtime and I'm now not compensated for it.

Well the very term “exempt” is from the term “exempt from overtime”, if you are exempt/salary you are expected to put in whatever number of hours it takes to do the job at the salary you are being paid.

"Frank, you pay me, I will work overtime. You don't pay me, and I go home. Don't be a dick Frank. Put yourself in my shoes."

https://www.dol.gov/whd/govcontracts/sca.htm

This may be helpful to you. I would say also, look at the contract, if you can, and the "statement of work."

I don't know the legal answer.

But being EXEMPT has always meant No Overtime Pay in every instance I've encountered.

quote:

Originally posted by PASig:
Well the very term “exempt” is from the term “exempt from overtime”, if you are exempt/salary you are expected to put in whatever number of hours it takes to do the job at the salary you are being paid.

This is the sum total of the situation.

Exempt means exempt from OT pay. Unless they changed the definitions since I was in IBM. You go into what we called the "professional" ranks, you went exempt.

Not a lot the OP can do except work the OT as required, hope for consideration from his management. Management most likely has the capability to award some form of cash payments. Not part of the work/salary. I know IBM did. It never provided that amount from the missed OT pay, but it helped take the sting out.

It is coming back to me, we called those "informal awards".

As a manager I too was exempt and worked whatever hours necessary to get things done right. There may have been no overtime but healthy annual fat bonuses and when a GM working for "Uncle" there were also salary step increase in whole or part based on how successful one met goals in a negotiated performance plan. Always thought the Feds screwed up when they dropped the GM program and reclassified everyone as GS.

Bottom line, whether in private or public sector, I found being exempt with no OT was more than offset by other means.

Not an HR opinion (I'm rusty) nor a legal opinion (IANAL.) However, two issues:

One is the payment of wages to you. If it's not a "service contract" where the Service Contract Act terms are incorporated, the SCA's wage payment standards likely don't apply to you. If you're not a "laborer or mechanic" on a construction project, Davis-Bacon (and D-B Related Acts) standards don't apply. Were there a complaint, WHD would potentially look to your exempt status for purposes of the FLSA (just because the employer says you are doesn't make it so, and being "on salary" is only one part of the test.)

Second issue, and a bigger one from my perspective (let's be honest, it's bigger to me because it's not MY pay that's affected) is that you're apparently working on some variety of a "Cost-Reimbursement" contract. The company's ACTUAL cost to employ you on the work is what's reimbursable. If they're billing the G for 50 hours of your work, but they're only paying you for [less than 50], then 50 isn't their actual cost and they're not being "reimbursed"-- they're turning that into a profit source. There might be some clause/condition of the contract that makes this permissible, but it'd be unusual. If it's not allowed in the contract, that's called "Micharging" and it's a variety of contract fraud. They're submitting a claim to the .gov that says X, the truth is actually Y.

Since knowledge/intent is sometimes difficult to prove in a Mischarging case, the G's favorite remedies for this sort of thing are administrative (terminate the contract for cause or convenience, debar the company) and civil (sue them under the False Claims Act, which carries rather draconian damage provisions... up to three times the amount of any false claims, plus an additional per-false-claim penalty of up to $10,000.)

If knowledge/intent is provable to a criminal standard, a plethora of criminal statutes also apply (mail/wire fraud, false statements to the .gov, false claims) but it'll be a double-tap because the .gov will STILL sue under FCA... probably after the criminal case is complete.

Want it fixed? In no particular order, call DOL's Wage-Hour Division, the contracting agency's OIG (for Defense, that'd be Defense Criminal Investigative Service, or DCIS) or a lawyer (find one who knows what a "Qui Tam" action is. Better yet, find one who's actually successfully litigated one.)

All,

I understand what "exempt" is, and as originally posted, I admit I fall into that category. I'm doing engineering work, which appears to put me in that category. I doubt Davis-Bacon applies, as I'm not a "laborer". However, where the sting is, is that up to now I've been paid for hours I've billed. Hours I've worked over 80 per pay period that were not billable were "exempt", and I've never had an argument with that. For example, I get one home trip per month. Travel is 11+ hours each way, none of which is billable. To date, I've done that almost all on my own time/ dime.

The other issue is, "is it 'legal'." Dennis, thanks for your informative reply. If my company gets audited, what would their exposure be?

Also, quite honestly, there's the "greed" factor on my part. I enjoy getting paid overtime, and it helps take some of the sting out of being away from home for a month at a time, with only a weekend at home.

Dennis, to your question, "[d]o you want it fixed?" Well, yes, but not necessarily at the cost of my job. So I need to figure out if it's worth bringing it up to management. It's not an issue quite yet, as they are not putting it into effect until the next contract renewal in February.

This is DOE, by the way, so if you have a suggestion of who to call, I'd be interested.

Thanks again!

If I’m not doing what I wanting to I.e. being home w my family, instead flying my ass across country, then I’m likely billing because it’s work. I bill all work as ghosting hours is poor management. Granted there are times when an 80hr week is necessary, as is sometime daily flying, but it has to balance out for me.

Seriously that you only get one trip a month? Dude, good jobs are so plentiful right now! Especially if you have a clearance.

This is a bit late, but the correct answer is no.
Your exempt status and your billing status are not related.
The travel situation is a bit more complicated. It may be billable time to the contract and probably is. But in addition you may be able to schedule it so that its also on your schedule and not outside your normal working hours. A bit more detail is needed on that.

hrcjon,

I’m ok with travel not being billable. I knew that going in. I wish it were different but it’s not a fight I’m going to fight right now.

What does annoy me is the company going to bill for hours they are not going to compensate me for - i.e., over 80 hours billed in a 2-week pay period, but only being compensated for no more than 80. Do you have anything I can cite to back up your “no” opinion?

I’ve been with the company 12 years. I get a decent salary, and 200 hours per year of PTO. I also just turned 60. And I know the realities of looking for a job at my age, despite the fact I’m in good health and shape. Which reminds me, I should post about my 60th birthday adventure of heli-canyoneering in Little Bluejohn in remote Utah.

Thanks!

Intrepid,

I feel your paid as a salaried guy when I have to work a 14 day job (straight through). We work longer than 8 hours most days, so you can do the math.

When I worked for a different company occasionally we'd get 'salaried overtime', but this might have just been a ploy to get a number of part time clingers to come back for a temporary contract, since they needed to fill butts in seats for a 2 week period and in the end we'd get pay for about 3 weeks since.

I was too junior at the time to know what made it different, but at that time I was just a straight 80hr guy, so overtime wasn't really a factor.

I used to work for Accenture. When I was first hired we were paid similarly to how you used to be paid. If we worked more than 20% OT in a 2 week period (80 hours), so 16 hours, we were paid for it. Then, the economy took a shit in 2007 and the company realized they no longer had to offer this "perk" as there were lots of folks looking for jobs. No matter how much OT we worked, and billed for, we didn't get paid OT. I am also exempt and work in IT.

My travel was never billable to the project and wasn't used in factoring my 80 hours. It sucked when I was on an East Coast project and flight time alone was 4 hours each way!

Consulting isn't exactly what it used to be, unfortunately, but still a decent gig. I have 2 small kids now so I left consulting and only travel once or twice per year.

I've often accrued "unofficial PTO" in exchange for my OT hours while on salary, a wink wink nod nod sort of thing with my boss which was usually an Exec VP or Division Pres.

Once, several years ago. I had surgery for a broken bone and got paid my salary for three full weeks without missing a step, and never had to spend a single hour of official PTO.

It still came out in their favor. In the 2yrs prior to my surgery I had worked 60-70+/wks.

It's primarily why I work for myself now. I expect to be paid for every damn minute.

It's kinda dumb that your boss is asking you to work OT when both he and you know you will not get paid for it. I'd tell him to pound sound in the nicest way possible.

quote:

Originally posted by muddle_mann:
It's kinda dumb that your boss is asking you to work OT when both he and you know you will not get paid for it. I'd tell him to pound sound in the nicest way possible.

There is no such thing as "overtime" when you are exempt. If you get your job done in 40 hours in one week, but it takes 60 the next week, that's just how it goes.

The short answer is no. Salaried employees are EXEMPT. Non-exempt are hourly and they can and should be paid OT if required. However, the Govt. must approve all OT.