How to Pay Interim Employees

Imagine this: A key player has left your company without having found his or her permanent replacement. What do you do? A common solution is to seek an interim employee, which could be any of your current employees, exempt or non.

Taking on interim roles or positions generally includes taking on additional responsibilities. Because of this, many employers have enacted guidelines regarding compensation for these employees. An increase in salary is not required, but typically encouraged. Other guidelines should exist no matter what - and are based on whether the employee in the interim role is already an exempt or nonexempt employee.

Exempt Guidelines

Several methods can be used to compensate an exempt employee taking on an interim position, including:

• A one time payment or bonus given for the extra work created by new responsibilities.
• Adjusting the employee’s pay for the time period he or she will be in an interim role. This is considered supplemental pay. If your employee is taking on a similar role but has some increased responsibilities, an increase of 5%-15% is commonplace. If your employee is taking on a role at a higher level, you should consider paying that employee a salary appropriate to that position. This is best practice should your employee be in the interim role for longer than three months.

Nonexempt Guidelines

Nonexempt employees are paid by the hour - whether they are salaried or not. If a nonexempt employee accepts an interim role, work with the human resources or compensation department to determine the appropriate modification to that employee’s pay.

Once the interim role ends or a permanent replacement is found, your employee’s salary returns to his or her original amount plus any bonuses or increases warranted during their time as an interim employee.

Have you paid an interim employee before? Let us know your tricks on PayrollTalk.