Topic Thread

Paying hourly labor during down time

  • 1.  Paying hourly labor during down time

    Posted 01-07-2019 14:37
    Hi everyone,

    I'm interested in knowing how you pay your hourly labor during down time. If you do, do you have them pay it back? Whats your process?

    We have a few weeks a year that our guys spend in between projects and we'd like to be able to pay them during those weeks, but we need to figure out a method for repayment. My largest concern is staying on the right side of the legal and ethical issues this process creates.

    Thanks!

    ------------------------------
    Edwin " Charlie" Gonzales MBA
    Accounting Manager

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  • 2.  RE: Paying hourly labor during down time

    Posted 01-08-2019 09:35
    We try to have the right balance of full time and part time employees.  During the slower months, the part time employees work less and often have a second job that is seasonal during the winter months.  If the full time employees also have less work, there are many tasks to catch up on around organization, marketing, or other skills we can put them to work on during these times.  Hope this helps.

    ------------------------------
    Mara Johnston BA, MCP
    Vice President of Business Development
    Star America Capital Partners
    Roslyn NY
    (610) 256-3379
    ------------------------------



  • 3.  RE: Paying hourly labor during down time

    Posted 01-08-2019 10:30
    Charlie - It appears your discussing furloughs.  In the US, a furlough is a temporary leave of employees due to special needs of a company, which may be due to economic conditions at the specific employer or in the economy as a whole.  I've not seen much written about furloughs; but it's certainly practiced through the industry.

    As for the legal / ethics aspect, you can start with the Dept. of Labor.  Furloughs are governed by Fair Labor Standards Act.
    Here's a link to the most recently (2009) published FAQ:
    https://www.dol.gov/whd/flsa/furloughfaq.pdf


    ------------------------------
    Dana Jensen CCIFP
    Chief Financial Officer
    ....
    The Woodlands TX
    (503) 201-4871
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  • 4.  RE: Paying hourly labor during down time

    Posted 01-09-2019 11:00
    Thanks Dana,

    I'll definitely read into this. We are a small shop and our original thought was to advance the pay and deduct it out of future pay, but I'm still working through those options with our payroll company.

    ------------------------------
    Edwin Gonzales MBA
    Accounting Manager
    JB&J Construction
    Atlanta GA
    (504) 920-3042
    ------------------------------



  • 5.  RE: Paying hourly labor during down time

    Posted 01-08-2019 15:59
      |   view attached
    Hi Edwin,

    A Supplemental Unemployment Benefits (SUB) Plan may be a good solution for you.

    This type of plan allows you to pay your workers a SUB benefit while they are collecting state unemployment benefits.  You can design the plan so that you can bridge the gap between what is received under state unemployment benefits and what their normal wage would be.  The amounts paid from a SUB plan are not considered wages and therefore are not subject to FICA and do not effect the amount they can receive under the state unemployment plan.

    I have attached an article that you may find helpful.  Good luck.

    ------------------------------
    Jeffrey Bennett MBA
    Co-Founder
    DirectAdvisors
    Albany NY
    (518) 362-2119
    ------------------------------

    Attachment(s)



  • 6.  RE: Paying hourly labor during down time

    Posted 01-08-2019 18:02
    Cool product I have not previously encountered.  Funding the plan with prevailing wage fringe contributions indeed provides an enormous cost advantage over paying fringe contributions as cash wage.  Definitely worth a closer look for merit shops.

    ------------------------------
    Dana Jensen CCIFP
    Chief Financial Officer
    ....
    The Woodlands TX
    (503) 201-4871
    ------------------------------



  • 7.  RE: Paying hourly labor during down time

    Posted 01-08-2019 18:30
    In regards to the supplemental unemployment plans, be aware that generally these plans need to be annualized. This means that you must contibute the same dollar amount for prevailing wage and non-prevailing wage hours. Some providers forget to mention this caveat when marketing their plan. These plans can be benefical if you can include the hourly cost in your non-prevailing wage work.

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    Kevin Halme
    Constructive Tech Solutions
    Omaha, NE
    www.consttech.solutions
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  • 8.  RE: Paying hourly labor during down time

    Posted 01-09-2019 06:45
    Absolutely correct.




  • 9.  RE: Paying hourly labor during down time

    Posted 01-21-2019 16:48
    The below plan was recommended by ownership, but I believe this falls in a bit of a gray area... please let me know what you think.

    The plan:
    During down periods of 1-2 weeks we would continue to pay employees 40hrs a week. If they agreed to this program, they would repay these hours and the costs of any benefits out of their overtime as they go forward. (i.e. hourly wages, cost of health insurances, etc)

    I've not been able to find any information regarding the legality of this and will certainly contact an attorney if necessary. Also, I've recommended that since we are a small operation, we should just offer advances with a set repayment method. I've read the information previously posted regarding furloughs and SUB Plans, neither of those apply to our current situation. Thanks for any added input you might have!

    ------------------------------
    Edwin Gonzales MBA
    Accounting Manager
    JB&J Construction
    Atlanta GA
    (504) 920-3042
    ------------------------------



  • 10.  RE: Paying hourly labor during down time

    Posted 01-21-2019 18:20
    Hi Edwin,

    You are a little outside my area of expertise.  I have copied on of my industry friends who is a payroll expert. He will likely be able to provide some guidance and solutioms. 

    Good luck.