Additional compensation for salaried, exempt employee

[The_Piston]

We had a male employee go on maternity leave for 2 weeks. Another female employee did some of his work while he was on leave. She billed our company through her LLC for the time she spent doing his work. It was a total of 15 hours billed. This male employee offerred to work from home if need be.

There have been many other times where I and other employees have covered for co-workers while they were sick or on vacation, but have never been compensated on the side for doing that work. This same female employee complains that she does not have enough time to finish her own work, so the company is now redistributing some of her work to other employees to relieve her burden.

I would like to know if this in any way violates any labor laws or equal opportunity laws. Please advise.

Thanks.

 

[Patricia_Young]

The male employee went on maternity leave? He should be on the news.

Not wage and hour laws, but if the employee that did the work was an employee, paying her extra as an IC/vendor will raise a red flag at the IRS.

What type of work does she normally do and is her company in the business of doing the other type of work that the absent employee does?

 

[The_Piston]

Answer

Ha. Well, when I say paternity leave, people question that too. His wife had a baby and men are now allowed to have "maternity" leave.

At any rate, I believe her LLC has been used for several different things. I do not know what nature of business she reports to the IRS. I'm sure it isn't this specific duty. I tried to look her LLC up on the state website, but could not find it.

Normally she does product management. This was data loading. Our PM's used to do all of their own data loading, but now we have a department (one guy) who does it now.

Additionally, after I posted my first thread, I realized that some of the time frames that she reported working through her LLC were during normal business hours, when she should have been doing her own job.

 

[Patricia_Young]

Personally, I'd tell her, this was your work assignment for the day and that's it. She has no business using her LLC to bill you for work that she performed during her regular business day.

Not being able to find her company on the 'net or in the phone book is not a good sign.

She has a lot of ba........um, nerve.

 

[The_Piston]

Couldn't agree with you more. I'm mostly concerned about the upper management that allowed this to happen. Very irresponsible as representatives of our company.

 

[Patricia_Young]

The IRS might also be interested in this, because if this payment should have been wages (and it almost certainly should have been), there are taxes that should have been withheld and were not. I think you can report anonymously.

Does upper management know about the fines and penalties involved with that type of violation?

page 25 here:
http://www.irs.gov/pub/irs-pdf/p15.pdf

and page 6 here:
http://www.irs.gov/pub/irs-pdf/p15a.pdf