Salaried Exempt Employees vs. Actual Hours

[James Ferrise]

We want to capture resources' Actual Hours on their
projects. However, in providing cost and budget
information, we want to limit the calculation of such to
be the resources' rate * a maximum of 40 hours per week.
This is because many of the resources are salaried exempt
employees. So, even though we want to capture the Actual
Hours they worked, we do not want to calculate the impact
to the total project cost beyond the limits of their
salary. What are our options in this situation?

 

[John]

James,
This simplest solution is to set up a spare field (e.g. Number1 or
Text1) to track the real actual hours of salaried exempt. You could also
set up a custom field to track the delta between "real" actual hours and
normal actual hours (i.e. 40 max per week). All normal cost tracking
fields in Project (e.g. Cost) assumes an hour worked is an hour paid.

Hope this helps.
John

 

[JulieS]

Hi James & John,
Another possible option is to change the way you are
tracking the actual work. Track anything over 40 hours
per week using actual overtime field. If you set the
overtime rate for the resource as zero any work over 40
will cost nothing. You will still have the total amount
of actual work, but only accrue costs for the 40 hours.

Hope this helps.
Julie

 

[Steve House]

Just offering some ideas to ponder ...

IMO, you should consider the costs based on total hours rather than a
cut-off at 40 even for salaried exempt employees. Think about it a moment.
Joe might not get paid overtime or paid extra for hours in excess of 40, but
if he has to devote a Saturday to bring a task in on-time isn't he going to
eventually take some "comp" time or discretionary time off? People don't
work for free, even salaried exempt people. It may not show up in a cheque
but somehow, someway, he is going to be compensated for that time and that
cost is a very real, albeit often hidden, cost to the firm of completing the
project and IMO should be reflected in the budget. If your budget will
reflect he's getting paid for 8 hours when he leaves at noon on Friday, then
showing that task as costing more than it actually does compensates for the
tasks that show costing less than they actually do in the overall big
picture. The usual case, however, is that you'll see accurate budgeted
costs for tasks completed within the regular work week but inaccurate costs
for tasks performed with hours in excess of the regular work week.

Some suggest leaving the OT rate for salaried exempt at zero but I disagree
and think it should be set instead to equal the standard rate. Putting it
at zero means that if you scheduled all of the hours for a project being
done by exempt workers to be worked outside of normal working hours, you'd
get the project done for free, which is obviously ridiculous. Its real cost
is going to be the same regardless of whether it's worked on 8-5 or evening
and weekends.