Regulation of Compensation and Benefit Programs

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Table of Contents

Introduction
Meal Period
Exempt Employee
Forced Vacation
Conclusion
References

Introduction

The regulation of compensation and benefit programs in the legal field is an important aspect of the control of labor relations between employers and employees. The application of specific policies and laws is intended to define the rights and obligations of both parties, and the consolidation of these obligations is coordinated in accordance with relevant regulations. The analysis of the proposed cases can help determine which laws are best suited to each scenario and why. As an additional rationale, possible arguments will be offered to the aforementioned rationales, and with the help of relevant academic resources, counter arguments will be given. All the cases reviewed are subject to the Fair Labor Standards Act and need to be analyzed under this law that defines the nature of compensation payments to employees, regulates working hours, and controls the order of payments on individual occasions, for instance, vacations.

Meal Period

The first case to consider concerns a situation in which employees had a 10-minute meal time that was not paid. In accordance with the agreement with the management, the workers were asked to leave the workplace 20 minutes before the end of their shifts, which, according to the suggestion of the managers, was supposed to compensate for lunchtime. However, the proposed terms violate the Fair Labor Standards Act. According to this law, if employees work more than 40 hours per week, they are entitled to compensation from an employer in no less than one and a half of their basic rate (U.S. Department of Labor, n.d.a). Managers’ explanations that the mealtime allotted was not included in working hours is unfounded due to the regulation of working hours and the employees’ right to take a break (U.S. Department of Labor, n.d.a). In addition, based on the case scenario, the employees left their workplaces without interrupting the operation of machines, which did not give the employer any reason to refuse compensation for the subordinates’ activities in excess of the norm.

As a potential counterargument, one can suggest the idea that the mode of work considered is a positive innovation in view of the possibility for employees to leave work earlier. However, even this perspective is not reasonable due to the factor of fatigue. According to Matsumoto and Gopal (2019), working overtime poses health risks to employees and, therefore, the threat of penalties for employers to compensate for the damage to subordinates due to exceeded work hours. In addition, in the absence of adequate overtime benefits, executives run the risk of being held accountable before the courts for labor law violations. Therefore, the considered scenario does not justify the managers who organized the unjustified change of the work schedule.

Exempt Employee

The case of the accountant who was classified as an exempt employee by his managers is controversial in terms of the existing legislation regarding the distribution of working hours. The Fair Labor Standards Act is a regulation that dictates the specific rules of the employment of exempt employees, in particular, coordinates their activities and defines these workers as those who do not receive payment for activities beyond the established norm (U.S. Department of Labor, 2019). However, when taking into account the considered scenario, the plant management took an unreasonable step and appointed the account the status of exempt. As a justification for the violation, the conventions of the case need to be taken into account, for instance, the flexible schedule of the employee. The accountant was entitled to the distribution of working hours individually and did not have clearly established shifts. However, payment for the work performed was based on existing labor laws, in particular, the hourly rate for a 40-hour workweek, which corresponds with the Fair Labor Standards Act (U.S. Department of Labor, 2019). As a result, there was no justification for assigning an exempt employee status.

One can cite a potential counterargument to justify the decision of the accountant’s managers. Flexible hours can be created for the convenience of the employee, and any overtime activity is paid based on the existing rate, which simplifies any payroll calculations and eliminates cheating. However, as Marcum, Cameron, and Versweyveld (2018) remark, only non-exempt employees are entitled to be compensated for work in excess of the norm, and since the accountant received exempt status, albeit unreasonably, payment for work in excess of the norm was unacceptable at the legislative level. Thus, the error of the management is evident because there is a clear legal framework governing the activities of exempt employees.

Forced Vacation

The case of the exempt employee who is forced to use his vacation to cover working hours can be dealt with under the aforementioned Fair Labor Standards Act that is best suited to this scenario. According to the issue’s background, the employee works over 80 hours in a two-week period. Since he has an exempt status, any payments in excess of the norm are impossible. At the same time, regarding forced vacation, the Fair Labor Standards Act does not regulate the financial aspect of this field (U.S. Department of Labor, n.d.b). In other words, the employee’s manager has the right to determine the compensation for the vacation individually. However, the coercion to use the prescribed leave has no legal justification due to the fact that the employee fulfills his norm comprehensively. In addition, if the relationship between the two parties is sealed by a contract under which the employee has an exempt status, such a remuneration scheme is illegitimate due to the flexibility of the schedule. Therefore, the management does not have the right to decide to replace working hours with vacation.

As a counterargument, one can state that the company covers the costs of the employee’s vacation, which is significant compensation provided by the organization itself and not a mandatory aspect of the labor law. Nevertheless, as Knepper (2020) argues, such compensation payments as vacation, health insurance, and others are individual items of organizations’ expenses and cannot be used as resources to pay for intermediate work activities. In other words, managers are not allowed to force employees who meet their work quota to use vacation to cover individual working hours. Therefore, in the scenario in question, the management’s requirements are unreasonable.

Conclusion

The Fair Labor Standards Act is the optimal law governing the three considered scenarios since the presented aspects of labor relations correspond to the regulatory field covered by this act, in particular, the distribution of the workload and managers’ and employees’ responsibilities. Workload overruns, vacation enforcement, and underpayment due to missed hours are the issues raised and discussed through the lens of this law. As additional sources confirming the relevance of the proposed solutions, the corresponding academic resources are involved.

References

Knepper, M. (2020). From the fringe to the fore: Labor unions and employee compensation. Review of Economics and Statistics, 102(1), 98-112.

Marcum, T., Cameron, E. A., & Versweyveld, L. (2018). Never off the clock: The legal implications of employees’ after hours work. Labor Law Journal, 69(2), 73-82.

Matsumoto, M., & Gopal, B. (2019). Solidarity, job satisfaction, and turnover intent in employees. International Journal of Workplace Health Management, 12(4), 247-257.

U.S. Department of Labor. (2019). Fact sheet #17A: Exemption for executive, administrative, professional, computer & outside sales employees under the Fair Labor Standards Act (FLSA). Web.

U.S. Department of Labor. (n.d.a).Overtime pay. Web.

U.S. Department of Labor. (n.d.b). Vacations. Web.

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