my boss is giving me gifts of his own money to make up for my low pay

A reader writes:

My question is about salary, bonuses, and gifts from bosses.

I’ve been at my company for four years; I do mostly administrative work in a legal department at a large, prestigious international organization.

When I started, I made the mistake of not asking for enough money — I was just desperate to get out of freelancing and have health insurance, and had no idea what to ask for. I actually asked for so little that they gave me $10k more than I asked for, at my boss’s request.

My boss is a great guy, always looking out for me and his other employee, very flexible with my schedule, gives me extra days off, etc.

Every year I’ve been here, I’ve gotten a raise (more than the standard percentage everyone gets, at mostly my boss’s behest), but now that my position has evolved a bit and I’m no longer so green, my salary is not at all commensurate with the work I’m doing or my value to the company. Part of the reason for this is that HR seemingly refuses to reclassify me as a salaried employee, which would change my bonus potential. (Right now it’s capped at a week’s pay; if I were salaried, it would be a certain percentage of my annual salary. This is an entirely different question that involves FSLA and exempt vs. non-exempt status that I might ask separately because it’s so frustrating.)

My boss, bless him, feels awful about this and also really doesn’t want me to leave because I’m not being paid enough, and has taken to giving me not insignificant bonuses from his personal accounts to show his appreciation. These mean a lot to me, but also make me feel weird.

Example: we closed a huge deal a couple years ago, and I made a joke about us getting commission. He joked back that people above us probably would, but not us. Then the next week he gave me a check from his personal account to say thank you for all the hard work and extra hours I put in helping to close the deal. To be clear, this is in addition to the holiday gift he gives me and his other employee every year. I accepted it, but felt strange about it.

Just today, he handed me another check (the largest yet) and said I was doing great work and he hoped HR would get it together (I’m paraphrasing), but in the meantime, here’s this to show his appreciation.

Is this … I don’t know … okay? Is this something that people do? Is this ethical? He really is a great boss, and clearly trying to make sure I’m happy here — I am 100% confident there are no ulterior motives other than trying to keep me from leaving. Giving me these bonuses isn’t creating any sort of hardship for him whatsoever, but they make me feel awkward and somewhat indebted to him, which is complicated because I’m planning on leaving at some point in the next year or so. Should I keep accepting these gifts? I don’t want to look a gift horse in the mouth, but this is kind of weird, right?

Yes, it’s weird.

I don’t think it’s unethical, exactly; your boss is entitled to decide how he wants to spend his money, and if he wants to dole some of it out to you, that’s his choice, as long as there’s zero pressure from your company or anyone else for him to do it.

If I were talking to your boss, though, I’d tell him not to. Your employment relationship is with your company, not with him, and they are the ones responsible for paying you for your work. If they aren’t paying you enough to fairly compensate you or to retain you, that’s on them, not on him.

He’s obviously coming from a kind place, but it’s inappropriate. It’s similar to if your boss decided to buy a new server for the company with his own money; that would be pretty clearly seen as Not Normal, right?

And it has the potential to cause problems from the company’s perspective if they knew about it. For one thing, if he’s paying people outside their formal salary structure, they have no way of watching for things like illegal discrimination (for example, if he were paying you extra but not someone doing similar work who was a different race, sex, religion, etc.). For another, they need to worry that if he leaves (or stops doing it after you’ve started to count on it), you’ll feel like you’ve gotten a cut to your pay. You might never feel that way, but it’s something they need to worry about. And they also need to know the true cost of retaining employees, which they can’t if someone else is secretly supplementing your pay.

It’s also potentially problematic from a tax perspective. These aren’t personal gifts; they’re compensation you’re receiving from the person who employs you for doing your job. Technically, that income should be reported and taxed. In reality, that’s probably not happening. Also in reality, it’s probably not going to end up causing problems for you — but you should be aware that it’s a legal issue because it could.

So, all that said, what should you do about it? It’s really up to you. The problem here is more on your boss’s side rather than yours for accepting it, and I could certainly understand if you wanted to continue accepting something that he’s freely offering. But if you feel uneasy about it (and there are good reasons for feeling that way), then you could always use the tax thing as an easy out, saying something like, “I really appreciate this — it’s so thoughtful of you. I’ve realized that it could cause us both some tax problems, though, since it’s not being run through payroll, so I don’t think I should accept. But I really appreciate your intent here.”

{ 148 comments… read them below or add one }

  1. MissGirl

    Another reason this might get awkward is if you feel pressured or guilted into staying or doing work beyond your scope because your boss is giving you cash gifts. Not that he is pressuring you but you might feel pressured. Let’s say you decided you want to move on to a company that values you more, would you be willing to do that or would you feel too guilty? This could become a sticky situation on many levels; whether it’s taxes, perception of favoritism, or pressure.

    Reply
    1. OP

      I would feel guilt regardless of the bonuses. I have a great working relationship with him, and did in fact apply and interview externally a bit a couple of years ago, but ultimately stayed because I couldn’t find anything better, and I genuinely enjoy working for this guy. But I do get what you’re saying. My boss has never asked me to do things outside the scope of my work, at least not yet. I don’t see it happening in the future, but I’m careful to draw boundaries at the office.

      Reply
  2. Zombeyonce

    OP, what happens if you decide to get another job and are hunting (and it’s looking promising) and he offers you another personal check? Even if you had an offer or were in negotiations but weren’t ready to give notice yet, I’m sure you’d feel incredibly awkward taking the money, but not taking it this time after accepting it all the other times would raise some questions to your boss.

    And if you did accept the money and then gave notice a month later? I worry that your boss would be angry about this and you could lose a good reference. I definitely don’t recommend taking the money.

    Reply
    1. Mabel

      Ooh, and also you won’t have any way to prove what your actual compensation is (not that anyone should be asking about that, but still…)

      Reply
      1. Jadelyn

        Hadn’t even thought of that, but that’s a good point. Consider things like loan applications, they would want to do a verification of employment including pay and it would only include your official salary, not these “bonuses”.

        Reply
    2. OP

      This is something I’m 100% confident he wouldn’t do. He knows I’m going to leave at some point relatively soon–I’m taking night classes in a field completely unrelated to my job that the whole office is aware of. We have an agreement (i.e. we’re both good-natured people) that I’ll give as much notice as possibles so they can find a replacement. And to clarify, the checks he’s given me have been infrequent and not life-changing sums of money–it’s a completely insignificant amount to him, but some nice extra spending cash or some plane tickets home for me. It’s not even a big enough gift to be reported on anyone’s taxes.

      Reply
      1. MommyMD

        It is. All income has to be reported on Federal taxes unless you make less than a couple of thousand per year.

        Reply
        1. Zombeyonce

          OP, I hope you read that comment. Because this money is coming from someone from your work and is for work you’ve done, the IRS is going to consider it income if you get audited. Someone cites precedent for this lower in this thread.

          Reply
  3. k

    My biggest worry would be that you or boss would now feel like you “owe him”. This would make it very tricky when you want to give notice for another job, because it can feel like less of a normal business thing and more of a personal slight. It just adds a layer of awkwardness to the workplace. It sounds like his heart is in the right place, but I’d want to end it.

    Reply
  4. Night Cheese

    Yeah, I think what Alison said sums it up, especially the tax piece of it. That was something that hadn’t even crossed my mind, but definitely important to note.

    While it’s great that it’s coming from a good place (I have bosses who definitely don’t value their employees like this), it sounds like this could get sticky in a lot of different ways. I’m curious if his generosity makes you feel pressured to stay though because that’s an issue in and of itself.

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    1. Kathy

      It sounds to me like HR had a position and that was all they were going to pay for it. The boss may have wanted more duties, more responsibilities from the position; but has to accept HR’s classification of the job or else not have an open requisition.

      So now the boss knows HR isn’t going to budge; so he is trying to keep the peace.

      Reply
      1. OP

        This is basically it. Another separate issues is that the work I can do is limited because I’m not an attorney, and it’s a huge bureaucratic organization, so when I’ve tried to take initiative and own a project that doesn’t require me to be an attorney, I’ve gotten caught up in red tape.

        Reply
    2. OP

      First off, great name. Second, I’ve never once felt pressured because of the generosity. I mean, the guy is a vegetarian Buddhist who spends his free time doing pro-bono environmental and preservation work for his town. When I do eventually leave, I’ll feel bad, but he and I both will know it’s because a) HR, and b) I have other interests that I’d like to pursue.

      Reply
  5. Tongue Cluckin' Grammarian

    We have a pathologist here at our lab that doesn’t like protocol (which is a huge issue in general) and frequently just goes out and buys stuff for the lab area (for business and otherwise) with his own money because he doesn’t want to deal with the proper processes.

    Not only does that make inventory and accounting kind of weird, it’s a serious show of favoritism because he doesn’t buy anything for any other area of our laboratory offices (like support staff). There are other shows like that too and it creates a silo between the techs and the support. It’s bad vibes.

    So, gifts from the boss can cause weirdness in all kinds of ways.

    Reply
    1. Mel

      OMG being able to follow protocols is essential and best practice for labs. That just strikes me as a huge problem. (I’m in research, so I’m hardcore for following proper protocol for both methodological purposes and health and safety.

      Reply
      1. Tongue Cluckin' Grammarian

        Preachin’ to the choir my friend. Not only do I make sure the protocols and procedures are written out properly (and updated), I’m a High-Control person to begin with. (Which is to this job’s benefit since I’m also Material Manager.)
        This path is a Big Cheese (not the Head Cheese, but high enough that sometimes all you can do is lose gracefully and work around it), so it can be difficult to enforce some things. If it’s truly egregious, or it goes against our accreditation requirements, we can usually push back with help and the path will shape-up because they finally got a “reasonable explanation”.
        Oh the frustration of being both a senior employee and being both appreciated for institutional knowledge and maintaining protocols, but also being support staff and for some reason thus considered “Not as important”. Sigh.

        Reply
    2. Princess Carolyn

      Yeah, Alison’s server example didn’t seem to out there to me, because I know people who operate that (and because I’m married to a teacher, who routinely spends our personal money on supplies). But it’s a problem for all the reasons you bring up.

      Reply
  6. Fiennes

    I trust this boss’s motivations, but IMO employee needs the boss to push harder on getting that reclassification/raise that’s so seriously overdue. I’m assuming the roadblocks are considerable — boss wouldn’t be dipping into private funds otherwise — but still, there must be a way. If boss feels strongly enough to pay out thousands (I’m assuming) to keep OP, exactly why can’t that pressure be brought to bear on HR? The fact of the initial salary raise at the boss’s request means there’s some room for influence there.

    It’s possible there’s an insurmountable reason — but if I were OP, I’d want to know what it was, because it seems like a dubious way to operate.

    Reply
    1. AD

      Agreed. And I’m a bit skeptical on how difficult it is for HR to re-classify, even for a larger company such as this. There must be ways to promote or reclassify high-performing employees, otherwise what function would HR be playing in a large org? I wonder if the boss is conflict-averse (or feels underprepared to deal with HR processes) and this is the way he has rationalized rewarding the OP and keeping her on.

      Reply
      1. Jadelyn

        It depends on what you mean by “reclassify”. If you’re talking reclassification to a higher salary band within the company’s pay structure, that shouldn’t be that hard, and it’s organizational politics that are the problem here.

        But if you’re talking about reclassification from hourly to exempt, that’s got strict legal/compliance requirements and tests that have to be met in order to properly classify someone as exempt. If the OP doesn’t meet those tests, that’s it, period the end, OP doesn’t get to be exempt. In that case, it’s HR’s job to be “the bad guy” and say “Look, we literally *can’t* do that without opening the company up to major liability for misclassification of an employee.” Not because HR is being difficult, but because they’re doing their job of knowing the law and not letting the company go against it. Which is what it sounded like was happening, to me.

        Reply
        1. The_artist_formerly_known_as_Anon-2

          Still can be done. Anything in the private sector – assuming that there isn’t corporate financial difficulty – can be done with a few phone calls and a managers’ meeting.

          That’s been my experience. If OP were to resign to go to another job where she feels she’ll be fairly paid, and made an exempt employee with benefits – trust me – if she were that important to her current company, they’d change quickly to keep her in the fold.

          If they’re willing to eat a little humble pie. Which would be the right thing to do, for the employee, themselves, and the enterprise.

          Reply
          1. Jadelyn

            LOL, okay. They “can” do a lot of things with a few phone calls and a managers’ meeting, sure. And then they can also pay the resulting back OT, fees and penalties a few years down the line for incorrectly classifying their employee. If we want to get technical, anything *can* happen – it’s just not in the company’s best interest, nor the employee’s, to try to circumvent existing law on exempt/non-exempt status.

            In this case, the best thing would probably be to redesign her job entirely, or promote her to a new role, that meets the tests for exempt status, and then make her exempt based on that. But it’s really not a smart idea to just change someone to exempt if their job description doesn’t meet the requirements for that, is all I’m saying – no matter how many phone calls and handshakes are involved – and from reading the letter it sounds to me like what she’s currently doing literally does not meet the duties tests for exempt status.

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            1. The_artist_formerly_known_as_Anon-2

              Yes, exactly – redesign the job. Or promote OP into an exempt position that already exists, that meets those tests.

              This is not a circumvention. It’s a promotion. It’s a re-classification. And it can be done. And it’s highly unlikely that a recently promoted employee will sue based on the fact that he/she should have been promoted sooner.

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              1. Jadelyn

                We agree on that part, but it’s not just a “reclassification” of an existing position at that point. It’s redesigning the job itself.

                And it might be unlikely that that specific employee will sue that specific time, but the idea of changing people’s exempt status willy-nilly without worrying about making sure their job description meets the legal requirements to do so sets a really bad precedent and can create quite a mess long-term.

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                1. The_artist_formerly_known_as_Anon-2

                  No, her duties have been redesigned by evolution over time, and her role has expanded. The job description can be changed to reflect the role as it exists today and it can likely be
                  changed to fit what OP is doing now.

                  This is not a “willy-nilly” change – it is one person’s situation and a role that’s being defined. And doing so is not a “bad precedent”, it’s often standard operating procedure to promote someone into a higher position.

                  As far as creating a long-term mess – this looks like it’s CLEANING UP a long-term mess, or avoiding one if the current situation is permitted to fester.

                  And if OP brought this situation up in the last few months, there’s nothing to sue over. OP said “this should be changed” – boss says “yeah…I’ll get it done” and within a few months – it’s done.

                  If they want to even be great about it, they can make the promotion retroactive, or give her a promotion bonus to cover the money she may have earned. But they, and perhaps the OP, may not see that as necessary, especially if the situation was fixed in the short term (perhaps six months is “short”).

                2. OP

                  I can’t reply to The_artist_formerly_known_as_Anon-2, but this is in response to that:

                  YES. This is definitely cleaning up a long-term mess. This is also trying to set a good precedent so this department can get organized and move into the 21st century, since it doesn’t operate the way it should.

                  There is no chance I’m going to sue this company, guys. I work in the legal department. I know how hard it is to beat us. Nope. Nuh-uh. Not gonna happen. Not worth it. (Also I’m not a litigious person and don’t have grounds.) Besides, we are definitely trying to do this on the up and up, and show that this is a legitimate EXEMPT position.

            2. OP

              My job duties could be written in a way that qualify me to be classified as exempt. There isn’t a position to promote me to, so I’m trying with my boss to create a position HR will be comfortable promoting me to.

              Reply
            3. Princess Carolyn

              Yes, or find a way around the policy that limits hourly employees’ bonus potential — either by changing the policy or making an exception. It’s a pretty silly policy in the first place and, I suspect, is designed to differentiate between “professional” and lower-level positions. That suggests that plenty of individual contributors in this company are misclassified as exempt because their jobs are seen as professional while OP’s is seen as just support staff.

              Reply
    2. Bellatrix

      This!

      “HR seemingly refuses to reclassify me as a salaried employee…”
      This isn’t the way things should work. HR is a support role, they shouldn’t be making these decisions, your boss or his boss or someone in your line of command should be. Who in the company is authorised to give you a proper promotion? Whoever that is, the boss (or possibly you, depending on reporting lines) should be talking to them.

      I feel for you OP, your company does sound dysfunctional.

      Reply
      1. Belle

        I wonder what type of role the OP is in that they are getting push back for reclassifing. Are they admin support and should get overtime? Letter mentions reward for extra time – were these hours tracked and OT paid if needed?

        There are times where a position doesn’t qualify as exempt but could then be compensated in a higher hourly rate, etc.

        Reply
        1. OP

          In the four years I’ve been there, I’ve only had to clock maybe an additional three hours, cumulatively, beyond my usual 9-5. If they won’t reclassify me, they could at least bump my rate up.

          Reply
      2. Ama

        Yeah, I really really hope this isn’t the case, and I trust OP’s assessment that her boss is sincere, but this sounds so much like my boss who claimed that HR and union rules were blocking my promotion and tried to make it up to me by telling me I could charge personal expenses to the company (I thankfully did not take him up on that because naive, fresh-out-of school me thought he was just confused about what expenses were allowable). When he got marched out of the office by security three months later because he’d been embezzling for the last ten years it became clear very quickly that HR could have pushed through the promotion if he’d really insisted but he hid behind that loophole because the promotion would have given me access to our budget and the ability to double check his expenses.

        I want to believe OP’s boss is just misguided, not manipulative, but something isn’t right with this HR explanation.

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        1. OP

          HR’s reasoning is that my title, Paralegal, mandates an hourly wage. This isn’t true, but they want to see legislation that says otherwise, which is hilarious, because that’s not how legislation works.

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          1. Fiennes

            That’s not only wrong, it’s incredibly wrong. Farcically wrong. “Your boss should tell the head honcho to hire new HR” wrong.

            Reply
          2. Princess Consuela Banana Hammock

            Paralegals can be classified either way, but I don’t understand why the company won’t pay OP discretionary bonuses. It avoids the tax and overtime penalties, is ok under most states’ legal ethics rules On fee-sharing, and would be helpful in bringing OP up to market parity. Of course, they could also just fix OP’s salary band and do a one-time correction to her base pay.

            Reply
          3. MommyMD

            Is the boss who is paying you off the books an attorney? If the income is not being reported, laws are being broken on both sides. The IRS has a way of finding things out and checks from him to you deposited in your banking account is evidence. If anyone knows about this at your work, you both are at risk. Tread carefully. I’d put a stop to it.

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          4. Jadelyn

            They’re basing it on the *title* alone? Wow. Do y’all share an HR person with my mom’s employer? Because she’s using the same reasoning even though my mom’s job description is thoroughly on the “exempt” side of the tests.

            “Legislation that says otherwise,” pfffft. Do they think, idk, the government releases lists of approved job titles or something? Good lord.

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      3. Dankar

        I don’t know if this is quite true. My supervisor has been doing battle with HR since I started in this role, trying to get me reclassified as non-exempt salaried. They are not having any of it, and it is 100% HR that is pushing back.

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        1. Belle

          But a good HR person would have a dialogue on what are options, what obstacles they are working around and options to meet the desired goal.

          It is often easier to make a position nonexempt vs moving to exempt. But communication would be key in rewarding a good employee for engagement and retention purposes to find an option that would work.

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        2. Jadelyn

          Salaried non-exempt is…kind of an odd duck, tbh, and more pain in the ass than it’s worth in my experience. But it doesn’t have the same compliance tests as reclassifying someone to exempt does, so I wonder why they’re pushing back? It might have to do with their payroll processing not being set up to handle it – I know that our sister company on the east coast has a lot of salaried non-exempt employees, and they don’t pay in arrears, so they are constantly doing OT adjustments to the prior paycheck for those salaried non-exempt people. But we couldn’t do that on our side, because we’re in California and OT has to be paid alongside regular pay. It might be something like that causing the issue.

          But as Belle said, they should be communicating with you and your supervisor on why they won’t okay that.

          Reply
          1. Dankar

            HR here is not exactly known for its open communication. Actually, from what I’ve heard, there’s very little love between HR and every other department.

            I’m not actually interested in moving away from hourly pay. My day stops when the clock hits 5, unless I’m doing a night or weekend event and that suits me just fine.

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      4. Jadelyn

        Actually, when it comes to classifying someone as exempt/non-exempt, that very much IS an HR decision. If the company wanted to promote her, or create a new role for her, then that part IS up to the boss or his structure, and HR shouldn’t be standing in the way barring some kind of exceptional circumstances or whatever – but that’s not the question here.

        Classifying someone as exempt/non-exempt is an HR function, because you have to know the various legal tests that have to be met in order to classify someone correctly. And if an employee is classified incorrectly, that can have really unfortunate compliance consequences for the company down the road – for example, I remember there was a class-action suit against a local credit union from their assistant branch managers a few years ago, arguing that they lacked the independent decision-making authority to make them appropriately classified as exempt and were doing the same job as the regular senior CSRs, just without being eligible for overtime. I believe they won their suit and the CU had to pay out a pretty penny in back OT and damages and penalties.

        So I’m sorry, but you’re wrong – HR absolutely *should* be making the decision on if OP can be classified as exempt or nonexempt. Reclassifying someone from hourly to exempt isn’t something a company just gets to do because they feel like it or they think someone is a high performer who deserves it. It’s a decision that has to be made in line with strict legal guidelines for those classifications.

        If we’re talking about “reclassifying” OP in terms of belonging to one salary band or the next, that’s a different question. But as far as reclassifying to salaried – yeah, no, that’s not HR being an obstacle, that’s HR standing their ground and saying “OP doesn’t meet [whichever one of the various tests] and therefore we can’t make her exempt.”

        Trust me, I get the frustration – I’m the only hourly person on my team, and it would be a lot more convenient if they would just make me salaried already dammit. But my role isn’t one that meets the duties test for exemption, especially under CA’s more stringent standards, so unless my job description is changed entirely they literally *can’t* make me salaried. It sucks, but there’s nothing they can do about that.

        Reply
          1. Miss Betty

            I think anyone can be salaried, but not everyone can be exempt. Where I work now, the paralegals are all salaried non-exempt and year ago I worked at a big firm where everyone was salaried – but the support staff was all non-exempt. Still had to get paid overtime if we worked more than 40 hours a week.

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        1. Green

          +1 here.

          We an entire set of employment lawyers who focus on just supporting HR. They have to make decisions that both make sense in an indvidual case and are consistent with other decisions and classifications across the company.

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        2. Bellatrix

          Apologies, I’m biased by a non-US perspective. However, even in the US hourly isn’t non-exempt and salaried isn’t exempt. Sure, it’s pretty common to conflate the two, because having salaried people exempt and hourly people non-exempt is easier on payroll, but they are separate concepts. Anyone can be salaried, but a salaried secretary still has to be paid overtime in the US, so most companies don’t do that. Doesn’t mean they can’t.

          But the point stands that raises and promotions aren’t dictated by HR.

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          1. Bellatrix

            There’s really nothing preventing the company from giving her more money or bonuses even if she’s hourly.

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          2. Saturnine

            This! I’m salaried non-exempt, and it sucks that I have to keep track of my hours unlike my exempt peers, but that’s pretty much all I have to worry about, as I get paid my full salary anjyway. I have to get any overtime hours pre-approved, so I rarely work over 40 hours a week, but I value my personal time so I don’t mind the lack of OT wages – they’ll be there for me if my workload ever does get high enough to put in the extra hours.

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          3. Jadelyn

            Hourly absolutely is non-exempt. You actually can’t have an hourly exempt person.

            Salaried, on the other hand, can be either, but it’s relatively rare to see companies using salaried non-exempt, and as a result many people use salaried and exempt as interchangeable terms.

            And, again, you’re right that raises and promotions aren’t dictated by HR, I explicitly acknowledged as much in my response. But my main point stands as well, that classification regarding exempt/non-exempt is.

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            1. Susan

              No, that’s not true. You can have an hourly exempt position. My department has hourly exempt and hourly non-exempt positions. The hourly exempt employees get comp time if they work more than 40 hours in a week (i.e., if they work 45 hours this week, they are paid for 40 hours and get an extra 5 hours of PTO to use in the future). Non-exempt employees have to get paid for all the hours they work, including time-and-a-half for any hours over 40 for the week.

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              1. Jadelyn

                Directly from the Dept of Labor’s fact sheet on FLSA: To qualify for exemption, employees must meet certain tests regarding their job duties and be paid on a salary basis at not less than $455 per week.

                Paid on a salary basis. Not hourly. What you have are salaried exempt employees who have a special PTO/comp time arrangement. That doesn’t make them hourly.

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        3. The_artist_formerly_known_as_Anon-2

          “I’m the only hourly person on my team, and it would be a lot more convenient if they would just make me salaried already dammit. But my role isn’t one that meets the duties test for exemption, especially under CA’s more stringent standards, so unless my job description is changed entirely they literally *can’t* make me salaried. It sucks, but there’s nothing they can do about that.”

          Yes, there IS something they can do about that.

          They can re-write your job description to an exempt position and promote you into it. What’s so “nothing” about that?

          Reply
          1. Ask a Manager Post author

            You don’t promote someone into a whole new role (that’s different enough to be exempt when the current one is non-exempt) just to pay them more. It’s absolutely not a given that it would make sense to do that. But you can just pay them more in their current role.

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            1. OP

              Yes, exactly. We did try to rewrite my job description to an exempt position with a new title that’s more accurate for the work I do, and HR is now “open to it,” but it’s like pulling teeth with them.

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              1. The_artist_formerly_known_as_Anon-2

                Exactly my point, OP — your job duties have evolved, likely into a lot more than what they were when you were hired on. It is not unreasonable to promote you into a new position (exempt, non-exempt, cuckoo for Cocoa Puffs, whatever) if you’ve taken on more responsibility and it’s acknowledged.

                Hey – isn’t that why people get promoted? Increased responsibilities?

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                1. OP

                  Exactly! Hey, can you do me a favor and call my HR? They apparently aren’t aware that that’s how things are supposed to work.

          2. Jadelyn

            But that’s changing my job. Which was my whole point – unless they change the job description itself, either mine or the OP’s, they can’t just make us salaried exempt employees. It’s not just a decision companies get to make, is my entire point here.

            I’m saying, if my (and the OP’s) job description stays the same, there’s nothing they can do about making me exempt, because my job doesn’t qualify for that status. Are there other solutions? Sure! But they involve more direct changes than just “make an existing person, in an existing role, exempt because we feel like it”. You have to change the role so that it qualifies for it.

            Or, as Alison said – just pay the person more, if that’s all you’re trying to do.

            Reply
      5. The_artist_formerly_known_as_Anon-2

        HR telling management what they can do? Ain’t that the “tail waggin’ the dog?” It could be that the boss is blaming HR for things that should happen but don’t….

        Reply
        1. JessaB

          Well HR probably determines with upper management what the salary bands are, and they should very much tell management that for instance raising OP’s salary would be a problem unless they also raised everyone with the same duties, or they could be liable in the future for a discrimination claim if the other workers in OP’s job are older, are female, are of a certain race, whatever that’s a protected category in the state they live in. It’s possible to raise one person’s salary, but unless HR is brought in, it could be a huge issue, and might still be an issue if they find out the boss is giving off budget money to only ONE person.

          Reply
    3. OP

      So, some clarifications:

      1. The checks I’ve gotten from my boss aren’t life-changing sums. They’re just really nice gifts that amount to at least the post-tax bonus I get every year from my company, at most $1,000. It’s not significant to him, but it’s significant to me.

      2. My boss has had multiple conversations with HR about reclassifying me. My title is Paralegal, which HR things is legally mandated to be paid hourly, which they think is the same thing as non-exempt. Paralegals ARE required to be non-exempt, i.e. qualify for overtime, but whether they’re salaried or not is up to the discretion of HR, or at least that’s my understanding of FLSA. (If I’m wrong, someone please correct me.) Initially, we tried giving them a list of my job duties that would qualify me for a re-classification. Then we gave them a new title. At the end of 2016, my boss told me they’re “open to it,” which means absolutely nothing.

      3. I am FOR SURE going to talk to my boss and have him push harder for my promotion/title change/reclassification. It’s a less hectic time of year now, so hopefully it’ll be a better time to ask.

      Reply
      1. Leenie

        I might actually be the only person on here who doesn’t find this that odd. I’m in a field where principals often get big pay days when a deal closes, and it’s pretty normal for them to write a personal check to support staff on occasion, as a thank you for their contributions to a closing.

        It doesn’t sound like it’s that much money. Your boss sounds like an honorable guy. It would be better for you if your firm fully recognized your value. But I really don’t find an occasional check all that alarming.

        Reply
        1. OP

          That’s essentially what my mom said. She told me to be gracious and accept the money, and didn’t find it that weird.

          Reply
      2. AD

        OP, to be quite frank, I’m not sure this is worth the hassle to pursue, if you’re planning to move on to another role soon (in another industry) as you indicated in a comment above. Am I wrong?

        Reply
        1. OP

          You’re not wrong, but in my particular circumstances, even a $5k bump in my salary would make a difference. I also don’t want the person who takes this job after me to get screwed, and I want the company to have a good understanding of what my role actually is and should be compensated for. I’m the longest survivor in this role (“survivor” is kind of misleading, but it’s a fairly boring job and I’ve lasted the longest), and the role is also evolving somewhat to be more autonomous, so the company really should compensate me accurately and have an accurate job description on file for when I leave.

          The first couple of years I worked here, I had a status meeting with a higher-up in legal who essentially manages all the legal teams worldwide (she’s like the face of legal), in which she actually asked me what I do and what my coworker (my boss’s assistant) does, because she didn’t even have an understanding. And then nothing. It just feels like no one cares about our team, which is ridiculous because we are *vital* to how the company functions as a whole and have constant direct interaction with C-suite executives and the owners.

          TL;DR: I guess it’s a matter of pride and wanting my company to treat me like more than a peon?

          Reply
        2. The_artist_formerly_known_as_Anon-2

          AD – often corrective action is pursued and executed in situations like this – to prevent someone from moving forward into another role at another firm. Employee retention is critical.

          The OP is pursuing a corrective action. Should that be accomplished, OP may indeed get to stay at her current company for a longer term and not be forced to move on.

          When a long-term. qualified employee leaves over unfair treatment – the company loses a valuable human resource. The boss does, too, because he has to hire an unknown, and perhaps pay that unknown person the higher wage that the OP was seeking, anyway. The company loses – OP is no longer available. The OP may end up better off but she loses, in a sense, because she is forced ino leaving a comfortable position for the unknown.

          Doing the right thing prevents people – employees, managers, and even companies – from becoming losers.

          Lose-lose-lose does not add up to a win, for anyone. There are some “management courses” that try to twist a lose-lose-lose into a win, but ….uh… yeah.

          Reply
          1. OP

            Yep. What makes it even more frustrating is that HR likes to talk about how much it nurtures employees and develops their talents, when all I’ve gotten here is literally held back from doing what I’m good at.

            No one above a certain level cares about how people below a certain level operate, and that’s especially true for our HR department. Managing up is all they do.

            Reply
            1. The_artist_formerly_known_as_Anon-2

              In other threads, I commented that at one place – they had a “no promotion unless the guy / gal quits” — in other words, the ONLY way to get promoted is to find a better job, resign, and wait for the counter-offer.

              At one place – I was told “I’ll submit you for promotion but if you don’t hear, you have a career decision to make.” I didn’t hear. I found two other jobs. I quit. The boss started hemming and hawing “gee whiz maybe next year, how much time do you have?”

              My reply = “When I get up out of this chair and leave the room, your opportunity to negotiate has ended. Now, if you have to make a phone call, I can wait on that. But the promotion is NON-NEGOTIABLE.” The counter offer was already prepared, he only had to get the VP’s approval on it.

              Reply
      3. Thinking Outside the Boss

        This could be good old fashioned law firm equity partner politics! Which is why I’m so glad I’m a government sector attorney.

        It’s clear to me that your boss has no problem increasing your pay, i.e. slightly reducing his profit margin, to keep you on as a valued employee. But the other partners might be blocking the raise or the change in title because if you get a raise, then the paralegals working for those other partners will want a raise, or a change in title, etc.. Maybe they all agreed to a certain salary band for non-attorney positions and you’re at the top of the band. Or maybe for some odd reason they all agreed to share non-attorney salary costs equally, so your raise will cost the other partners $154.29 per month and they just won’t stand for that. Who knows?

        For the short term, you should definitely be reporting these checks as income on your taxes because they’re not gifts, they’re bonuses. And the firm should be reporting these checks through payroll to make everyone’s life easier.

        Regardless, good luck OP and I wish you success!

        Reply
  7. Jane

    Yeah, this seems weird. The only time I have seen bosses pay employees out of their own pockets is in the context giving a year-end bonus to an administrative assistant or a bonus on assistant appreciation day, but what is described above seems so different.

    Reply
    1. JessaB

      Yeh usually give bonuses and presents maybe in small offices, but larger companies not so much. I know when I worked in a small law/accounting office in the middle of a larger firm, I got a cheque or a present from the other office for my turn managing the front desk and phone when it was my turn. I wasn’t employed by them but by the smaller firm so I usually got something nice or a cheque. But the people who worked for the larger firm that owned the building, got cheques FROM the company not from individual lawyers. From the individuals they got actual presents.

      Reply
  8. Alice

    It’s easier to say “find a new job” than to do it, and I get that OP has a good relationship with her boss — but how long do you want to work for an organization that refuses to compensate staff appropriately? Even if your boss is great interpersonally, he doesn’t have enough standing/autonomy/authority to change this bad situation. What happens when your team needs a new hire, or when you need the company to invest in new equipment? Long term I hope you can end up somewhere where you’re compensated appropriately by the company, not by the boss. Good luck! (And I hope that kind boss does too.)

    Reply
    1. shep

      In FirstJob, where I was still very new to work norms, my boss (whom I considered a friend after a lapse of time, which I realize isn’t ideal at work) asked me if I could look after her cat for the weekend while she and her family were out of town. Just basic feed-him-once-a-day-and-pet-him-if-he’s-around stuff. She didn’t live very far from me, either.

      She tried to pay me $300. I’m sure this was her way of trying to give me a bonus because upper management wouldn’t. But I knew she was already struggling financially, so I refused and negotiated her WAAAY down.

      In retrospect, though, I kind of wish I’d taken it. (Also *her parents* were upper management, and most definitely would’ve compensated her that money. Grudgingly, but they would’ve done it.) Not only was I ALSO struggling financially, being paid way below market and having my grad loans suddenly go into repayment, but I put up with a LOT there, despite being friends with my boss. She was a great person, but a mess to work with. And the next time she “asked” me to watch her cat, it was for an extended weekend and I found out I was watching him because her husband came to my office to hand me the key to the house and said, “Thank you so much for doing this!” He had the good grace to be totally embarrassed when he realized I had no idea what he was talking about, but then I couldn’t refuse because they had no one else to watch the poor guy. Also, she paid me exactly nothing to watch him. (I realized later she’d texted me about ten minutes before and said, “Oh my gosh I forgot about the cat! Can you watch him pleeaaaaassseee THANK YOU.”)

      This is also a good example (to myself) of why I don’t have out-of-office friendships with people anymore.

      Reply
  9. Bend & Snap

    This also could present tax challenges. There’s a cap on how much money one person can gift another tax free and it could make things messy if you had to explain it.

    Reply
    1. The Not Mad But Occasionally Irritable Scientist

      That cap is something like $19,000, and the gift tax is paid by the giver, not the recipient. I think the tax angle is being overstated here.

      There’s enough of a potential issue with the power/pressure dynamic and HR “refusing” to reclassify the OP. I really, really don’t think this impinges on taxes.

      Reply
      1. Ask a Manager Post author

        The IRS isn’t going to consider this a personal gift; it’s coming from a representative of the employer. It’s going to be considered compensation, not a personal gift.

        Reply
        1. The Not Mad But Occasionally Irritable Scientist

          Arguably, a generous reading of the situation would consider this a personal gift, but the IRS is not known for entertaining arguments that start with “arguably,” nor for their generous readings…..so yeah, point taken.

          Reply
          1. Bea

            The taxes would fall in the bosses lap most likely because of failure to report the compensation with a 1099 if they wanted to go that route. We got audited a few years ago and the people paid in cash without a 1099 or considered as true contract workers resulted in a bill for back taxes.

            So I agree the tax angle is a small one and wouldn’t play it so much personally. Unless the boss owns some of the business and may be writing off the checks as an expense.

            Reply
            1. Tax Nerd

              The taxes would likely fall on the OP. AAM is right that the IRS is going to consider this compensation for work, and taxable to her.

              Technically, the company could be in trouble for failing to accurately report wages and withhold appropriate taxes, because it’s a representative of the company doing it. I’m sure there would be a lot of other explosions between the company finding out about the side payments from OP’s boss, and the IRS sending a bill for W-2 error penalties, but still.

              Reply
              1. Princess Consuela Banana Hammock

                Doesn’t tax liability fall on both parties? OP would owe income tax, and her company would owe payroll taxes, etc., for this kind of off-the-books compensation.

                Reply
            2. MommyMD

              It will fall on them both. Neither are declaring. Checks deposited in her account are proof she knows about the payments. The IRS can and will go after a scenario such as this if they find out. I have a family member who audits.

              Reply
        2. Engineer Woman

          I’m curious why it couldn’t be considered a personal gift from an IRS perspective. Why can’t a boss, after 4 year of working together day after day, be a personal friend as well as a colleague (I’m actually against truly considering a boss the same as other friends, such that even if a close friend were promoted as your boss, there are some changes now to consider)…

          Yes, boss is lobbying for more pay from company for employee but the personal side of him could, conceivably, gift a personal monetary gift to his employee. No?

          Reply
          1. Ask a Manager Post author

            It’s coming from a representative of the employer as recognition for work he’s done. The IRS says that’s compensation. (Same as if your company gives you, say, a gift card … or cash. It’s taxable, even if it’s a “gift.”)

            Reply
            1. Zombii

              Any amount or over a certain amount?

              Toxic ExJob used to have (let’s say) “sales contests” to see who could “sell” the most “teapots” during a given timeframe. The winners would get an Amazon gift card because the person in charge of the “contests” said the company didn’t have to report these bonuses prizes to the IRS if they were under $50.

              This always sounded like unearned income to me.

              Reply
          2. Princess Consuela Banana Hammock

            It’s definitely not a personal gift. If your boss is offering you money in relation to your job or job performance, it’s the functional equivalent of a bonus and has to be accounted for as compensation. It doesn’t really matter whether you’re friends.

            Conversely, if you had to have kidney surgery and your boss gave you money to defray that cost, you’d be closer to gift territory. Or if he gave you a cash gift on your birthday. The distinction is whether the $ has a nexus to your job/performance and whether your boss is acting as a representative of the employer.

            Reply
      2. Princess Consuela Banana Hammock

        No; the tax angle is a big deal. Combined with the lack of reporting, this could easily wrack up tax penalties. We’re talking about failure to contribute payroll taxes, social security set asides, etc.

        Reply
  10. Mike C.

    I hope this doesn’t come across as too picky, but this stood out to me:

    Part of the reason for this is that HR seemingly refuses to reclassify me as a salaried employee, which would change my bonus potential. (Right now it’s capped at a week’s pay; if I were salaried, it would be a certain percentage of my annual salary. This is an entirely different question that involves FSLA and exempt vs. non-exempt status that I might ask separately because it’s so frustrating.)

    HR could easily allow for higher bonuses for hourly folks so you can be compensated well even if you fall under the legal requirements for hourly pay. The fact they don’t is frankly insulting – do they think that hourly folks simply aren’t capable of making enough of a contribution to deserve a larger bonus? Come on.

    Reply
    1. Antilles

      That jumped out at me too. This is somewhere between a misunderstanding of the rules and total bull by the company.
      1.) This policy is ridiculous for a ‘large international organization’ (i.e., not government). As long as finances and management allow it, they can basically give employees as much money as they’d like.
      2.) Why not just reclassify you as non-exempt? There’s a minimum salary beneath which they can’t classify you exempt, but there’s no such limitations on making you non-exempt (i.e., paid for overtime) as far as I know.
      3.) If they really wanted to give you that bonus and didn’t want to reclassify you or change their entire policy, they could just find a way to work it into your base pay – we want to give you a $10,000 bonus for work on the Alpha Project so we’ve raised your salary by an extra $385 per pay period as a pseudo-‘bonus’ paid over the next 12 months.
      There are just so many ways that they could figure out a way to work this that I’d be incredibly skeptical of this explanation by the company.

      Reply
      1. Jessica

        My unfounded assumption is that somewhere along the line, the boss has petitioned his superiors to make her a salaried employee, and the superiors only look at dollar signs and are perfectly willing to let a productive, engaged employee walk rather than increase her pay.

        I say this mainly because, in my organization, the people in the roles of my boss have hiring authority, but the approval for adding headcount and converting contractors to salaried employees is a couple levels above them. The pay and bonus structure are organization-wide and requires a not-inconsiderable amount of red tape to re-categorize an employee by salary–it requires the same level of approval and justification as hiring. My bosses are given a pool of money for merit increases and bonuses for their teams, and have zero authority to give anyone an extra lump of cash no matter how much they deserve it (not without taking it away from another team member, which also needs to be justified). I’m sure that there certainly is a level in the company where a boss can decide unilaterally to boost a subordinate’s salary or bonus, but it’s definitely not down among the managers or even the directors.

        Reply
        1. fposte

          Though the OP may be correctly classified as non-exempt, and it could just be a stupid way to do bonuses.

          Reply
        2. I'm Okay, It's Okay, Everything's fine.

          Do you work at my company? Because you really could. There is a lot of very strict and unmovable protocol and almost all of the decision-making is at a really high level (held by only a few people). And there are practically no exceptions made, except for maybe at the executive level. Granted, we are an organization of 60k+ employees; they run a tight ship.

          Reply
        3. Antilles

          It’s probably true that the boss may not have authority to do anything (‘large international organization’ sounds pretty inflexible). But for OP, the practical reality of the situation is simply that their excuses are just that: excuses. If the company *really* wanted to get it done, they’d find a way.
          Either OP needs to accept and be happy with her salary as-is or she needs to move forward with her plans to look elsewhere. Because regardless of whether it’s malice, bureaucracy or apathy, it’s explicitly clear that a major adjustment to the salary is never happening in her role.

          Reply
      2. Princess Consuela Banana Hammock

        I have a hunch HR is worried about the bonus seeming non- discretionary, which triggers all sorts of compliance headaches. But the cleanest solution to that is to pay discretionary bonuses, instead.

        Reply
  11. Green

    This isn’t really OP’s problem to deal with, but these kids of bonuses can cause weird cultural changes as well. (In her situation, if I needed the money, I’d take the money. If I didn’t need or want the money, or got weird signals from the guy giving it to me–guilt vs. enthusiasm, for example, I’d decline.)

    This kind of sentiment is really common in the large law firm world, but it is still couched as “gifts” for holidays, birthdays, Admin Assistants Day, etc. As a junior associate you’re often expected to give substantial sized gifts, ostensibly to thank your admin, but often they view it as a part of their compensation. Somehow, it’s evolved from optional to quasi-compulsory, from one holiday to many, from small gifts to large checks, and from it being a law firm’s responsibility to properly compensate their employees to attorneys having to “make it up” to their administrative assistants for there being a massive salary differential between AA and lawyer jobs.

    “Winter holidays” tend to coincide with bonuses, and so you’re expected to “spread the wealth” a bit. At many firms, admins support 4-5 attorneys, and it is expected to give about $100 for every year of your seniority for each giving “event.” So, if you’re a 5th year attorney, you may give your assistant $500 three times a year, while he/she is receiving more or less from other attorneys.

    I just think it’s weird. It takes a “gift” from being a “gift” to being cash or gift cards totaling 4-5 figures each year per employee. And giving from appreciation rather than from obligation or guilt is much more fun.

    Reply
    1. Emi.

      Oh my word. I knew lawyers are supposed to give their assistants nice gifts, but I had no idea it was like this. Does someone take you aside and explain it to you when you’re new, or are you just supposed to know?

      Reply
      1. V

        I learned from asking other associates what they do, and from reading blogs like Corporette and Above the Law.

        Reply
      2. bridget

        I’m sure it varies across big law firms, and probably also by seniority and office size. I’m in a smaller office of a big firm, and do not pay anywhere near this amount. The associates in my office determined that if we all put in $40, we could get each staff member (not just assistants, but also copyroom staff, reception, etc.) a $50 gift card to Amazon or somewhere similar, so we did that and signed holiday cards. Something similar happens for Administrative Professionals Day. Partners might make much more significant gifts, but I’m not sure.

        As for who tells you, we have meetings and leadership for our group of associates, so we can make consistent decisions and let new people know what the typical process is.

        Reply
        1. Green

          That’s nice that you have leadership and meetings for consistency. I learned by giving my assistant a $50 bottle of champagne for the holidays two months after I started and then her talking about the iPad (then much more expensive) that the 4th year associate got her and seeing everyone else whispering about their checks. Followed by immediately searching Above the Law and gchatting my law school friends and being like “Oh Sh*t.” Oh, and that’s in addition to a fancy lunch with booze. (BTW, they make it clear they don’t want spa or restaurant gift cards–Visa, Mastercard or Amazon only pls)

          #awkward

          Reply
          1. bridget

            Wow, that’s super generous. I know we on the Cravath scale get paid pretty obscenely, but I’d still call an iPad a pretty extravagant gift.

            This might also be related to the fact that I don’t have a dedicated secretary – we use a pool instead. iPads for 3-5 people gets pretty ridiculous.

            Reply
      3. Princess Consuela Banana Hammock

        The amounts vary by firm size, region, structure, etc. You pick up the “rules” either through explicit training or through more passive “mentorship.”

        Reply
    2. V

      Echoing Green’s experience. I’m in the legal market that is one step smaller than Big Law, and I generally see big year-end gifts to assistants ($100 per year of the attorney’s experience, as Green said) sometimes via check and sometimes via gift card, and much smaller Admin Day and Birthday gifts ($50-100 each). It honestly did not occur to me until reading this post that this system is problematic. (And I’m a dedicated AAM reader, so I’m embarrassed that this has been a blind spot for me.)

      Reply
    3. ace

      This is what also occurred to me when reading this, and I’m wondering if the boss’s background (possibly at a lawfirm?) makes him feel like personal checks are appropriate.

      Side note: Although it’s been hotly debated across Corpor ette and Above the Law, I’m a biglaw lawyer in a major city that’s not NYC, and nobody in my office or at other firms that I know of follows the $100/year rule. Associates typically do between $100-300 for holiday, plus $50-100 gift for admins’ day and birthday.

      Reply
      1. TK

        OP says in the letter she does “administrative work in a legal department,” so it sounds like her boss probably is a lawyer, actually. That would explain to a great deal of the reasoning beyond these actions.

        I have to say as someone who will probably be a lifelong government employee, this admin-compensation scheme used in biglaw seems incredibly bizarre to me!

        Reply
        1. Green

          Oh, I missed that it was a “legal department.” Yeah, I think boss is definitely awkwardly drawing upon law firm experience here.

          (Also, there’s the “rule of thumb” of $100/year experience, but it varies wildly by firm/office/location. And it can get weirdly competitive–hoping the assistant will give your work priority–and partners can be expected to easily drop $1k or more, at least for the year-end. It’s made even weirder by the fact that usually none of the lawyers actually “manage” the admin in a direct-report style, and that we’re more like competing clients.)

          Reply
          1. ace

            Agree how expensive it can get — my equity partner boss writes our secretary a check for several thousand dollars every Christmas… She’s also incredibly devoted to him (and is worth ALL THE MONEY) but it’s a lot!

            Reply
            1. blackcat

              My dad (a lawyer) had an incredibly devoted secretary for nearly 20 years. He simply made her salary a part of his salary negotiations (she followed him between several firms, so any deal to hire him would also say “Jane gets at least X.”). She was making well over 100k/year in salary when she retired. That seemed like a much more civilized approach!

              Reply
    4. Abby

      Yes this does happen at law firms. Of course, one difference is that attorney pay is tied specifically to their billable hours and so it is viewed that attorneys then need to pass this one.

      Reply
      1. Green

        I’ve never heard anyone tie it to billable hours (or the exact amount of your bonus, which assistants don’t necessarily know). It’s really mostly the awkwardness of being 25-28, fresh out of law school, and starting at $160k (now they start at $180k!) while your assistant (who often could be your mom/dad) makes much less. You feel guilty, they often have a long-standing relationship with a partner and it’s just like “AWKWARD. PUT SOME MONEY TOWARDS THE AWKWARD TO MAKE IT GO AWAY.”

        Reply
          1. Green

            I am specifically talking about the large law firm context (“biglaw”), which is what I was describing for purposes of the bonus culture for admins. There are hundreds of firms with large classes of incoming first years each year and high turnover (just the top five firms have about 10,000 US-based attorneys). The market rate for those starting jobs is now $180k in major cities and was $160k until recently. The salary scale is well-known by years of seniority (when I was in biglaw it was 160, 170, 185, 210, 230…).

            But, yes, others reading this thinking they should go into law to make that should know that there is a bimodal salary distribution. You either make a lot of money upon graduation or not a lot of money upon graduation, with very few folks in the middle. So don’t think “Oh, I don’t need to start at $180k, 120k would be just find for me!” and assume that’s available.

            Reply
    5. Princess Consuela Banana Hammock

      But the admin gifts aren’t supposed to be substitutes for compensation. The gifts are the equivalent of giving your doorman an end-of-year cash gift and aren’t really related to your job or job performance.

      That said, I hear you on the cultural issue and agree that the boss may have imported these gift customs from BigLaw.

      Reply
  12. Anonymous Educator

    Just an opinion here, but if I were in the OP’s shoes and assuming I didn’t need the money to pay my bills but could just really use the extra cash, I would turn down the gifts and really push my boss to push HR to properly reclassify me as salaried. If that didn’t happen soon, I’d start dusting off my résumé. Not exactly your boss’s fault, but you’re still stuck in the situation whether your boss can help it or not.

    Again, I’m qualifying this with the supposition that it’s “nice to have” money and not “essential to pay rent or be evicted” money.

    Reply
  13. Still Another Alison

    I feel for OP but I would not take the money for reasons that Alison gives. You do not want to get into the middle of an IRS situation. More fundamental is the way the company appears to be stringing her along. If your boss wants to pay you more, you know you should be paid more, the data says you should be earning more – the company is taking advantage of you. Please don’t wait to leave – be kind to yourself.

    Reply
  14. Kate, Short for Bob

    Can’t believe I’m the only one wondering if this is Donna, and what is like working for Harvey Specter :o)

    Reply
    1. legalchef

      Oh come on. Donna would never need to write in to AAM. She would just automatically know answer. Because she’s Donna.

      Reply
  15. Snarkus Aurelius

    I worked in state government in a red state. When the legislature had the opportunity to raise state employee salaries, they refused because they assume we all get rich on the taxpayer’s dime and do nothing to show for it. Not really, but who really got screwed was the janitorial staff who made just a little more than minimum wage.

    During the holiday season, the HR branch would frequently conduct fundraisers to raise money for the janitorial staff who hit hard times. While it’s a noble goal, the gesture repeatedly boiled my blood because if we state employees (who were also underpaid) did the job that the state legislature was supposed to do, then where is the legislators’ incentive to raise pay? None! Why bother trying to lobby them for a permanent, year-round solution when they know damn well this special fund is going to be there come holiday time? Some legislators used that special fund as a reason to not support pay increases.

    Which brings me to you, OP. Not only is your boss is saying he knows what you should be paid better than your employer, but he’s also removing any incentive to encourage your employer to pay you what you deserve. Why should they step up when someone else has? You know how you show your employer that you should get what you deserve? Salary research or finding another job.

    Reply
    1. Chaordic One

      I once read a biography of a well-known actress and in it she said that when she got her first hit sit-com, back in the early 1990s, she and her husband made a decision to pay her personal assistant a salary in addition to what the TV network was paying him. Apparently they both like him a lot, thought he was doing a good job, and were afraid that he’d leave (because he was being paid peanuts by the network).

      They had a legal contract drawn up and paid him out their own funds (I think they had their own production company). They withheld taxes, reported it to the IRS and they didn’t provide any extra benefits or contribute to his 401K. Still, with the extra income he could have probably made a bigger 401K contribution.

      But it was a very weird situation where he ended up traveling with them on promotional tours and he was kind of ready to work 24/7 and it might not be very comparable to the OP’s situation.

      Reply
  16. Abby

    I agree with not taking the cash and pushing HR. The company does need to recognize your contribution and your role. However, I really do think that your boss is trying to do the right thing. He isn’t trying to make it harder for you. And you weren’t wrong to accept the money that time.

    Reply
    1. Anonophone

      I’m coming too! OP (assuming you want the money) you could think of it from your boss’ perspective that the personal stress it would cause to him to have you leave over pay is worth the personal cost of these bonuses; take them until you find something better suited to you experience level.

      But of course that’s assuming you want the money/awkwardness – it’s of course fine if you don’t (or if it just isn’t feeling worth the discomfort to you)

      Reply
  17. Lana Kane

    This would make me way uncomfortable. Many people above have made the case for all the ways this could go pear shaped. But I also don’t think you did the wrong thing in accepting it. It’s a super awkward spot to be in and it’s hard to know how to react.

    I think framing it around the tax issue leaves the chance for him to say “Well, it’s just between us, then.” Which will make the OP have to be more direct anyway. I think it’s is perfectly ok to say, “I really appreciate that you are looking out for me this way, Boss, but to be honest I just don’t feel comfortable with you having to shoulder costs that should belong to our employer. I would consider it a great help to me if you continued to go to bat with HR to get my situation fixed, instead.”

    Reply
  18. Chicken Fishing

    I understand your boss’ urge here as I’ve had it with awesome employees. Usually I’ve offered more schedule flexibility whenever possible instead (extra days off, flexible hours, occasional wfh, whatever I had the ability to offer). If any of these things might be incentives for you could you suggest those instead? As in “I really appreciate the gesture, but I’m not comfortable taking your personal money. However, I would love to be able to work from home once a week, is to something we could negotiate?”

    Reply
  19. DouDou Paille

    Not sure if this has already been mentioned, but getting part of your compensation “under the table” could make it hard to negotiate your salary at your next job. If your verifiable income at your current job is significantly different from your actual total compensation (including off-the-books payments), the future employer might wonder why you are seeking such a seemingly large jump in salary. Unless you are prepared to tell them about the “extra” money you are making…

    Reply
    1. Engineer Woman

      If OP doesn’t consider the money as compensation and isn’t used as basis of future compensation – which should be market rate of job duties and ability of candidate to perform, not how much candidate has made in the past anyway – it’s not an issue. In this case, I wouldn’t see the money as part of my compensation but a personal gift.

      But, yes, if OP does consider as compensation and would report her salary to new potential employers as such – a problem.

      Reply
      1. MommyMD

        It is compensation. Boss would not be giving her the money if she did not work there. It doesn’t matter how any individual sees it. It’s how the law is structured.

        Reply
  20. Alex

    Frankly, I don’t think the LW’s boss is doing her any real favors in the long run. Apart from the awkwardness it creates, he needs to accept that he truly can’t afford to keep her and the best thing, career-wise, would be for her to go to a different company where she can get the pay (and the title!) she deserves. Sort of the business version of “if you love someone/want to support a great employee’s career, set them free.”

    Like others have said, she can’t prove what her real salary was since part of it was paid off the books and under the table, as it were. And even though she was doing a job that deserves a higher title, the company never gave it to her so her resume won’t reflect that.

    I was also screaming (in my head, anyway) “TAXES!” while reading this. You’re responsible for paying income tax on all your earnings and if the IRS ever decides to audit you this could really come back to haunt you.

    Reply
  21. e271828

    OP not only has tax implications to consider, but this under-the-table compensation does not count for 401(k) matching or the opportunity to deposit a percentage pretax in any kind of savings benefit plan, if there is one. It’s invisible to Social Security [PLEASE NO RANTS ABOUT SOCIAL SECURITY FUNDING THX] also, so earned benefit there is lower than it would be.

    On the bonuses, many companies do this, and they do it with stock grants too, with minimal or no goodies for the support staff. Boss isn’t doing any favors by coming up with the pocket-money workaround here either.

    All in all, a band-aid that should be ripped off. It’s easy to get comfortable with an oddball situation like this, but this one has gone on a little too long. If the boss can’t invent a new position and put OP in it, OP needs to seriously consider moving on. Maybe there’s an opportunity for an internal transfer, if the boss does not have the juice to correct the classification and compensation inequities—and it sounds like he doesn’t.

    Reply
  22. OP

    Hey everyone. I wanted to point out some things I couldn’t get to in my letter (tried to keep it to that maximum wordcount, Alison!):

    – The company I work for is privately owned, and can do whatever they want in terms of creating positions (keeping in mind all legality issues related to classification). This often happens in HR and Communications. They create new roles all the time for people they care about (I just may not be one of those people).

    – The company has thousands of employees worldwide and is not in dire straits financially by any stretch of the imagination (I’ve seen the numbers).

    – The checks that I’ve gotten haven’t been huge amounts, but they’re not insignificant to me, considering my pay and my cost of living. The last check he gave me would just about cover my rent for the month.

    – My title is Paralegal, which HR believes is legally mandated as hourly/non-exempt. They’ve asked me (through my boss) to find legislation saying otherwise, which, LOL OK.

    – My boss and I have come up with a list of my job duties that classify me as exempt (I essentially do records administration, but it’s complicated–my boss has an admin assistant and it’s not me). All other legal support staff are paid hourly. There is no position to promote me to, so we’re trying to create one. My team is literally my boss, his assistant, and me, and we’re separate from the rest of the legal department. And his assistant is shared with other executives, so it’s really just him and me.

    – I’m currently taking classes outside of work that have nothing to do with my job, which I intend to pursue professionally, hence the reason I’ll be leaving my job sometime soon. I am comfortable there, and of course I’m scared of leaving, but I’m not going to go looking for another job I don’t really want to do when there’s something I’m really passionate about that I can make a career out of (it won’t be easy, but I’m excited about it). Essentially, I’m staying where I am until I can find a way to make the side hustle my full-time hustle, because overall I enjoy working there. All the office knows about it, including my boss; he’s just asked me to give him enough notice when I leave so they can find a replacement for me. I also am aware that everyone knowing is probably having a negative effect on how much HR and whatever other higher-ups have to sign off on it care (sorry for the grammar). However, I’m still a great employee and am undervalued for the work I do, and whoever they replace me with is probably going to ask for more money and get it.

    – I’m under no delusions that I’m irreplaceable at my company, but I’ve gotten positive feedback and am generally liked by coworkers and executives.

    – I feel no pressure whatsoever from my boss to stay late, do things out of my scope, etc., and he’s never asked me to stay late or do things out of my scope. The opposite–he lets me out early when the weather’s nice on Fridays, doesn’t make me dock my time for doctors’ appointments, gives me a snow day here or there. He’s always been supportive when I want to take more responsibility and helpful when I need him. Honestly if I weren’t planning on leaving for another field, I would probably either stay there longer and lobby for that promotion, because we have great benefits and it’s overall a good place to work, or really kick up that job search.

    Sorry that was long! I’m trying to respond to comments!

    Reply
    1. Dislike Names

      I’m going to go ahead and say that HR isn’t going to be motivated to do something different for someone that is going to stay anyway, for now, and it’s widely known that they’re leaving in the not distant future. I really think that’s the crux of the HR issue. What’s the motivation? I’m not saying it’s the moral thing to do, just pointing it out.

      Reply
      1. OP

        Oh yeah, they have no motivation at all to keep me, but also can’t let me go without my boss pulling the trigger on it, so they’re content to just keep saying “we’re working on it” and not get anything done. I totally get their perspective and where they’re coming from, but at the same time, I could leave next month, or I could change my mind and just leave for another job. Either way, I get the short end of the stick because I’m not getting compensated correctly now, and if I go to another job, I’m going to have to ask for a huge salary bump that they’re not going to want to give me. Believe me, I’m really kicking myself for not asking for more money when I started. Ugh.

        Reply
        1. Bubbalove

          OP this goes to the point that I posted, if you leave and ask for the bump you tell them the reason is you were underpaid and the work market reflects that. Employers understand that and the worse they’ll say is no. Value yourself, no one else will, fight for yourself, no one else should and lastly I’ve found the squeaky wheel always gets the grease even if it’s warped.

          Reply
  23. Demiduoux

    Tax free income AND your boss doesn’t sexually harass you (I’m assuming LW is female), you are living my dream.

    Reply
  24. Susan

    While this is a complicated and awkward situation, I kind of want to shake your boss’s hand for reaching into his own pocket to recognize a subordinate’s contributions to the company. My managers do pretty much the opposite. They get a bigger bonus for going under budget, and they do that by refusing to let anyone work overtime. Even if, say, three people call in sick for the same shift, they will just expect the rest of us to do extra work so they don’t have to pay someone overtime to cover for the absences. During our busy period, the company gives us extra money in our budget for overtime because they know there’s a ton of extra work, but the managers don’t let us work the extra hours so they can go under budget and get a bigger bonus. They work us to the breaking point just to make sure we don’t get any extra money so they can get a bigger bonus. I wish my managers had the same attitude as your boss.

    That said, ideally, your boss should be fighting to get you a raise instead of augmenting your salary from his own pocket. I know in a lot of places, that’s easier said than done, but usually if a manager pushes hard enough, he should be able to make it happen. He might have to go over HR’s head to his own boss, and he might have to call in some favors, but if he values you that much, I have to think there is a way he can get you the salary you deserve.

    Reply
  25. MommyMD

    I think if you are not happy with salary, you look for another job. I would never take personal money to supplement my income. If the IRS finds out, and you haven’t claimed it, the penalties alone will be at least triple what you were paid off the books. And put you on their radar forever

    Also if even one other person at work knows about this they could report you. It’s not worth it.

    Reply
    1. OP

      The amounts I received previously aren’t large enough (alone or cumulatively) to incur any penalties beyond the tax due and interest (which, I know can get big pretty fast, because that’s how interest works, but I’ve done the math and it’s not at least triple what I was given, not even close), and I don’t think you could make an argument for fraud or negligence, though I’m sure the IRS would try. I’d never even thought of the tax implications before because it was never an amount of money that was larger than a really, really nice holiday gift. I know the tax issue is important, but I still think those implications are less important than the other issues here, frankly.

      Reply
  26. The Purple Weirdo

    OP if it makes you feel any better: two minutes before I read this one of my bosses texted me that they were sick and could I do X for them? I said sure. X is in no way part of my job but I am fully capable of doing it and my schedule is open today. They said they should pay me and I laughed at them (via text). I do X for various people regularly and some pay me others buy me multiple lunches. It does make me feel a bit weird, so you are not alone.

    Reply
  27. Marisol

    First, some anecdata: well over a decade ago, when I was considering working as a legal secretary, I had a conversation about negotiating salary with a recruiter. She mentioned to me that in her day working as a legal secretary (1980’s? in the Los Angeles area) it was common for bosses to make up salary differences out of their own pocket; for example, a lawyer brings his secretary with him to his new firm but the firm won’t pay the secretary what she had been making previously; the lawyer, not wanting to lose his trusty assistant, paid the extra few thousand dollars himself. Given that the OP is in the legal department, I wonder if her boss is coming from a similar ethos. I don’t know how reliable my recruiter’s account is, or how reliable my memory is, but I do think it’s possible that things like this are more common than Alison or the commentariat realize.

    Second, the advice from Alison et al to refuse to take the money is frankly annoying to me. Your boss wants to give you money. He gives it in good faith. He can afford it. Take the frigging money. Don’t make life harder than it is.

    And especially, don’t start looking for a new job because—the horrors—the boss wants to give you extra money! Oh, the humanity! Such abuse! Seriously, I can’t believe people are construing this as a reason to quit.

    The tax issue is a non-issue. Declare it on your taxes—voila problem solved. Some commenters are expressing concerns about the IRS that seem rooted in paranoia. But no feds will be knocking on the OP’s door, for heaven’s sake. In the EZ form, all you do is fill in the box that says something like “other compensation” and longer forms aren’t much different I’m sure. Lots of people who are self-employed and/or who get paid in tips negotiate this very thing on a regular basis, and I’m sure the OP, who is a paralegal, can handle it just fine. Worst case scenario, she can pay someone to do her taxes. She might want to bear in mind that any personal checks she receives from her boss come with a tax liability, and make a plan not to spend all the money she receives. While that’s a bit onerous, it’s not so onerous as to refuse the money outright. And lastly, she can always consult with a tax pro in advance of receiving any checks, in order to best know how to proceed. In short, the tax issue is not scary, and need not be a factor in deciding whether or not to receive extra compensation from your boss.

    Reply
    1. OP

      Thanks for this. I do have an accountant that does my taxes, and I can ask him about the tax issue. In the past I’ve declared additional income because I was also freelancing in another field on the side (totally allowed in my employment contract, people, don’t worry).

      I don’t actually know if my boss came from an environment like the one you described, but I do know he’s pretty much a by-the-books kind of guy, always likes to dot the Is and cross the Ts, you know, so I don’t think he’d ever do something to the degree of legitimately supplementing an employee’s income like that. Genuinely, I think these are just gifts so I know he values me, enjoys working with me, and wants me to stay as long as possible. And actually, once I transition to my other field, I fully expect him to be a client of mine!

      Reply
  28. Noah

    FWIW, I’ve worked places where both Boss and OP could be fired for this arrangement. Like: that was the official policy, though I doubt it was closely policed.

    Reply
  29. Bubbalove

    Why not ask for a salary adjustment? I’ve done this in the past, gathering salary information for sites such as glassdoor.com and such and present that to my boss. This allowed him to go to HR and show what the market value was and to do not a raise but an adjustment.

    I think you boss is putting you in a strange situation. Keep one eye open, nothing is free.

    Reply

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