I’m very excited to present this guest post from Donna Ballman, the fantastic employment attorney who writes the great Screw You Guys, I’m Going Home blog, where she talks about legal issues in the workplace. If you don’t already subscribe to Donna’s blog, you should do so right now!
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Salaried Employees and Missed Days: When Do They Have To Be Paid?
by Donna Ballman
Alison asked me to answer a question from her readers. When I agreed, she asked you to post your questions for me and, boy, did we get lots of great ones. The question that was chosen for me to answer is an area that both employers and employees find confusing. I’ll try to help cut through the confusion and misinformation by answering this great question:
How about an article about “salaried employees”? For example, if I am a salaried employee is my company obligated to pay me for things such as snow days (office closed) or jury duty? What are the pros and cons for the employee to be salary as opposed to hourly? What about “sick days”? If the company doesn’t have “sick days,” is a salaried employee required to use a vacation day if they are “sick”?
If you are salaried, it doesn’t necessarily mean you are an “exempt” employee, meaning you are exempt from the overtime requirements of the Fair Labor Standards Act. Some of the answers to these questions will depend on whether or not you are exempt. Most of these questions are addressed in one federal regulation.
I’ll address the issues in order.
Natural disasters/office closings: If the employee is exempt and they worked any portion of the work week, they have to be paid their entire salary, whether or not the office is closed for a natural disaster such as snow, hurricane, or flood. Further, the regulations state, “If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” This would include natural disasters, so if the employee is able to work after a natural disaster, then they need to be paid even if they didn’t work any portion of the week. If the employee is non-exempt, then they don’t need to be paid for the time the office is closed. However, if you take deductions from a non-exempt salaried employee it may affect the way overtime is calculated. I’ll explain below.
Jury duty: See answer above. However, some states do require payment for time taken as jury duty. Alabama, Connecticut, Colorado, Massachusetts and New York appear to have requirements that all or part of the juror’s wages be paid during jury duty. The regulation states: “While an employer cannot make deductions from pay for absences of an exempt employee occasioned by jury duty, attendance as a witness or temporary military leave, the employer can offset any amounts received by an employee as jury fees, witness fees or military pay for a particular week against the salary due for that particular week without loss of the exemption.”
Sick time: You can deduct for full-day absences if you have a policy for doing so. You can also apply the employee’s sick leave/PTO time if they have any. The regulation states:
Deductions from pay may be made for absences of one or more full days occasioned by sickness or disability (including work-related accidents) if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability. The employer is not required to pay any portion of the employee’s salary for full-day absences for which the employee receives compensation under the plan, policy or practice. Deductions for such full-day absences also may be made before the employee has qualified under the plan, policy or practice, and after the employee has exhausted the leave allowance thereunder. Thus, for example, if an employer maintains a short-term disability insurance plan providing salary replacement for 12 weeks starting on the fourth day of absence, the employer may make deductions from pay for the three days of absence before the employee qualifies for benefits under the plan; for the twelve weeks in which the employee receives salary replacement benefits under the plan; and for absences after the employee has exhausted the 12 weeks of salary replacement benefits. Similarly, an employer may make deductions from pay for absences of one or more full days if salary replacement benefits are provided under a State disability insurance law or under a State workers’ compensation law.
Personal leave: Another exception to the requirement that the employee be paid for the entire week if they work any of it is taking personal leave other than for sickness or disability. The regulations state: “Deductions from pay may be made when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability. Thus, if an employee is absent for two full days to handle personal affairs, the employee’s salaried status will not be affected if deductions are made from the salary for two full-day absences. However, if an exempt employee is absent for one and a half days for personal reasons, the employer can deduct only for the one full-day absence.”
Advantages to salary: Employers like salary because they know exactly what their expenses will be week to week. If an employee is exempt, then paying them salary means you don’t have to pay them overtime. However, some also like to declare non-exempt employees as “salaried” and fail to pay them overtime. That’s bad. Really bad.
Consequences of getting it wrong: If you make improper deductions from a salaried employee, you might lose the overtime exemption. If you fail to pay overtime to someone who is entitled to it, you can end up paying double the amount owed, plus attorney’s fees. And everyone who wasn’t paid in your entire workforce can be joined into one hairy mess of a lawsuit that can be very costly. Don’t screw this up. My recommendation is that if you don’t have a good handle on exempt vs. non-exempt, either get good legal advice from a management side attorney or pay hourly and keep excellent records.
The Department of Labor has quite a few fact sheets that cover many issues like this one on the Fair Labor Standards Act and the other laws they cover. When in doubt, check to see if your issue is addressed.
Thanks for inviting me to blog on this important issue. I hope my answer helped. I’ll try to answer some more questions on my blog, Screw You Guys, I’m Going Home. Keep those questions coming. You can ask here, or in the comments section of my blog.
{ 47 comments… read them below or add one }
Donna, thank you for sharing this with us! Its wonderful to have this info gathered all in one place by someone who knows what they are talking about. Thanks and I’ll be visiting your blog next!
As an employee who has encountered the jury duty question in my own life, I was interested in hearing about my rights. However, I didn’t understand the answer given by the author. Maybe I am dumb…
If you’re daily pay is $100, and you get $20 for being on jury duty, your employer can pay you $100-20 = $80. That way, you’re not “double dipping” and getting both your salary and the per diem.
Egads. Your, even. :)
i’ve never heard of anyone i know who has a salaried position also getting paid overtime, when required.
some get paid straight time but it depends on the contract terms with the client.
That’s probably because people often use “exempt” and “salaried” interchangeably, when they aren’t necessarily. The problem comes about when non-exempt, salaried people (which I have never run into either) don’t get the overtime they deserve because someone thought that just changing a person to salary means they don’t get overtime pay
right. so many times I have heard the phrase, “you don’t get overtime if you are salaried.”
it pisses me off.
I’m non-exempt salaried, and all this means is that I’m paid hourly but I work a regular schedule. This is different from someone that works in retail or food who may have a unique schedule every week.
I think my company has us all on the books as non-exempt, salaried. I get the same paycheck every week, but I’m not allowed to get overtime, so anytime I work extra, at a later date I just get unofficial time off that doesn’t get put on the books.
Oh, but look! Based on the fact sheet above, because I’m an admin, it doesn’t matter, I don’t get overtime protection. Huh.
Anonymous, if you’re salaried exempt you have to be paid while doing jury duty if you worked any part of that week. In some states, you have to be paid, period.
SME, the reason your “comp time” is off the books is it’s illegal. If you’re non-exempt they have to pay overtime and can’t book it as time they owe you. If you’re exempt, then comp time should be okay. Most people classified as administrative exempt probably really aren’t exempt though based on the duties they perform. Few have that level of discretion and responsibility.
That’s really helpful! Thank you so much!
Exempt employees.. ugh. I am one (under the “Computer Professional” one) and I hate it. Totally used to an employer’s advantage.
As a fellow exempt “computer professional” I really think employers should use caution in loading up on OT. It would really help if there was a common practice for salaried IT people, and others whose duties require being on call off hours.
There is a difference in being asked to come in a little early or stay a little late during crunch time which can happen for all employees as opposed to being required to head into work in the middle of the night, or weekends, or holidays – at a moment’s notice. There should be a structure in place to account for that.
I can understand not wanting to keep in house IT hourly – because many of us do fit the exempt criteria and because not everyone has bosses who truly understand the nature of our jobs so vetting the necessity of OT can be problematic.
It seems our only alternative can be a salary high enough so the OT doesn’t breed resentment…and that’s hard to come by.
Jamie,
Unfortunately, there is a structure.. it’s “do it or else” at most places. :(
I’m familiar with that structure, Frank.
I think we need a better one.
I don’t want to start a fight here because I understand that the topic is a political hotbed, but forming some sort of professional group/union/guild/etc would go a long way in improving the working conditions many computer professionals endure.
I mean christ, many of you guys don’t get basic things like overtime and are on call at crazy hours. I hear crazy horror stories about constant crunch times and being perma-temped is nuts. It’s about times you folks had some power to fight back.
Mike,
It’s 2011. Most people can’t be bothered to cook dinner for their families, let alone form a union.
Maybe if they didn’t have to work a ton of unpaid overtime they might find the energy to do so . ;)
We do have power. It’s called finding a new job and taking our experience with us.
This has made me really curious as to the average work week for exempt personnel.
We’ve all seen people who work the system as exempt and rarely put in a full forty – but I would imagine most of the time it works out for the benefit of the employer.
Nothing wrong with working a longer week – I’m just curious. Does anyone know of a good link to stats on this? (Figured I’d ask before I made a note to myself to google it tonight.)
I am an exempt (and salaried) employee. Our company makes us take a PTO day if the office is closed (due to snow, power outage, etc.) Is that legal? (We still get paid, but we have to use one of our precious few PTO days…)
Unfortunately, from a quick Google search, the answer is probably yes it is legal, but IANAL!
Yes, it’s legal. On the other hand, if you ran out of PTO, you’d still have to be paid and could not be docked pay. But, then you’d probably get talked to about poor planning of your PTO time.
I’d be pretty upset if I got lectured about poor planning of PTO time. It shouldn’t be my responsibility to plan for snowstorms, seeing as I’ve got no control over the weather…
I read the original post to say that on a snow day an exempt salaried employee MUST be paid their full salary if they are able to work…..so I took that to mean that you should not be required to use any PTO. Did I interpret that wrong?
Bob, they can’t dock pay from exempt employees for snow days, but they absolutely can make exempt employees use PTO. Not fair, but it’s the law.
I apologize if I missed this while reading this blog entry, but I notice the statement “The regulation states” several times. What regulations are we speaking of? Are we talking Fair Labor and Standards, some compilation of state regulations and agencies?
I stated in the post, “Most of these questions are addressed in one federal regulation.” The regulation is linked in that sentence.
I understand the full day pay , but what about an employee that leaves after 5 hours of work ? He has sick time and vacation but since he worked over the 4 hours he believes he does not have to use them. I’ve been all ove rthe DOL and can’t get a clear answer.
Can I make him use his vacation to cover the hours missed at weeks end? Or am I stuck with a 5 hours a week employee??
While you can’t dock a salaried employee’s pay, you can certainly discipline and/or fire him for not working enough.
Our company policy is to pay our exempt employees for every hour they work using straight time overtime. A handful of us have been asked to work extra hours on a project and not put the overtime on our timesheet. Is this allowed? I understand that exempt employees don’t have to receive compensation beyond 40 hours, but if it is our company policy to do so, and there are 20000 other employees who are not asked to give up that benefit, is that legal?
If you have a contract that spells out that you’ll be paid for each hour of work, this would violate that contract. But otherwise, I think this is legal … assuming you truly are exempt (by the govt’s definition, not just your employer’s). However, I’d want to know why you’re being asked to do it.
I am an exempt salaried employee. I just had surgery and workmens comp tells my employer not to allow me to work until doctor says that I would have no restrictions. Question I have is employer required to pay me my salary during my recovery time?
They probably need to let you use up any paid leave that you’ve accrued, and then beyond that they can have you take unpaid leave.
I am an exempt salaried employee, but have a contract that states that I get comp time and my employer just amended my contract to say that I may have comp time or overtime. However someone told my employer that I am not eligible for this, but I believe I am since my contract states so. Am I correct?
If you have a contract that allows it, then the contract would be what’s in effect. I suspect that whoever told your employer that you’re not eligible for overtime is confused about the law — exempt employees don’t HAVE to get paid overtime (non-exempt employees do), but that doesn’t mean that the employer can’t decide to give it to them anyway. So your contract is perfectly enforceable.
If I’m exempt and salaried, I make 40 hrs by Thursday and ask for Friday off, is it legal for my company to require that I give up a vacation day? What if we have a two week pay period that has to add up to 80 or more (ex: 45 hrs week 1 and 35 week 2)? Does that count as comp time?
Yes, they can require you to use vacation time. They just can’t dock your pay for that time.
I think I know the answer to this but would like it clarified to be sure; I am an exempt salaried employee, and a few years ago my employer began closing the office the day after Thanksgiving and refused to pay the hourly and salaried (exempt and non-exempt) employees. Employees were given the option of using a vacation/personal day if they had days available, otherwise the employees were not paid for the day. Is this accurate and legal for the employer to do?
No! The Fair Labor Standards Act requires that exempt employees be paid their full salary for the week if they worked any portion of that week. If your employer was closing for a full week, they would not need to pay you for that week. But one day? They have to give you your regular check.
However, for non-exempt employees, they can indeed subtract that day from their pay. (Whether they should or not is a different discussion.)
I Work for a doctors clínic and it was damaged by rain very bad so we were told that if we wanted to get paid we had to clean up and i mean taking parts of ceiling off drying the floors we have even been doing tape and flow and we are just receptionists. and. medical assistants
If i am a salry employee, and i am sick and dont make it to work. do I still get paid for those days, or am I docked that pay for the week?
Can you work on an unpaid internship while you are on a paid sick leave from your full time job? somebody I know took 2 months of sick leave (with a doctor’s note) to finish his internship, is that legal?
Thanks
Hmm, I assume they could legally fire him for that if they found out.
I am a salary employee who works 36 hours a week. I requested 4 hours of vacation instead of taking 4 the company took 8 stating I am to work 40 hours when its actually 36.
I notice in the ‘sick leave’ section you repeatedly specify ‘full-day absences.’ How would a partial-day absence related to a medical problem fit into this, and can I be required to use accrued PTO for such an absence?