I agree that we need to get the FLSA out of the way, as long as no one takes it to the point of abuse. How to draw the line? Well here are some ideas.

We have put employees on temporary layoffs, now referred to as “furloughs” and maintained their benefits for a maximum of 90 days while on furlough. If they are not called back within 90 days, they will be terminated and their benefits eligibility ends. We started doing this with some of the hourly workers that we thought we might bring back when work in their area picked up. It soon extended to some salaried supervisors and managers as well. In order to get these employees back to work before their benefits run out, we have brought them back part time.

The question became, how do you pay salaried employees working part time? I should point out that nearly all salaried employees are working at reduced salaries, and hourly employees have had both their hourly wages and, in many cases, their weekly hours worked reduced. So, the employees suffer as the business suffers during this economic hardship, with the continuity of benefits being one strong consolation and value we can offer.

My understanding of the FLSA is that it is never wrong to pay a person by the hour, as long as you agree on an hourly rate. We have been using the current salary divided by 2080 hours (or the weekly salary amount divided by 40) to use as an hourly rate for salaried employees now working uneven hours. While I think that’s fair, recording of hours is an issue – salaried employees don’t punch a clock. If I work 6.5 hours per day for five days, I expect to be paid for 32.5 hours that week, not 29 hours. Apparently I have to prove to payroll that I worked those hours and should not be docked for a lunch break I never took.

Another suggestion is to have the salaried employee come back at a reduced schedule (less than 40 hours) and a further reduced weekly salary payment. This keeps the employees receiving a flat weekly amount, which is how they are accustomed to being paid, and they don’t have to keep records of their hours. This is also fine, I think, if they are paid the flat rate regardless of hours put in, and they are not required to work well in excess of the agreed upon schedule on a weekly basis.

Another step we had to take was to cut holiday pay in half. April and May were both months with scheduled holidays. Those months were so dismal for the business, we had to reduce the holiday pay to manage the cash for the month. This also presents and FLSA question: Can you “dock” salaried employees by four hours, or 10% of their regularly weekly salary, during a week in which their is a holiday? Well, the only other option would have been further salary and wage reductions.

Tough times DO call for creativity, and it’s always a tightrope to walk between keeping people employed under the stringent legal rules and laying people off to get past those rules.

Great points made, Tim.

I enjoyed the many points of view you bring to this post. In my former life as a graphic designer working in advertising and marketing, what you describe as working for free was called working on spec, and perfectly acceptable for many, especially for those starting out and wanting to get a foot in the door. Agencies still have to work on spec to create elaborate ad campaigns to win accounts.

I think Ariel Horn is doing a world of good providing work space for the unemployed. As a life and business coach I have been working with corporate refugees, the newly unemployed in recent months and I can tell you they are scared, depressed, cut off from their network and suffering from a loss of confidence. If their identity is tied to their job, they are really in trouble.

Tough times call for creativity, and it can be hard to find solutions in isolation. Ariel Horn is creating a win-win situation, giving people a space to connect, collaborate, create and find hope for the future, as well as keeping talent close by. He may not be able to hire them full time, but isn’t great he can hire them on a freelance basis?