It’s a common misconception that employers can’t require exempt employees to work a specific schedule or at least 40 hours a week. An employer may, in fact, do so and remain in compliance with the federal Fair Labor Standards Act (FLSA). The key is to pay exempt employees their weekly salary without any reduction for quality or quantity of work.
In general, a reduction of an exempt employee’s weekly salary violates the FLSA, but there are several exceptions. These include full-day salary reductions (as long as no work is performed) for the following:
- Personal leave.
- An exempt employee’s first or last week of employment.
- Sick leave if an employee has exhausted or is not eligible for an employer’s bona fide paid-leave plan.
- Disciplinary suspension for violating workplace conduct rules or major safety rules.
There are only a few scenarios that allow partial-day deductions. These include federal Family and Medical Leave Act absences (prorated based on the number of hours absent) and suspensions for major safety violations.
Keep in mind, an employer is forbidden from reducing an exempt employee’s weekly salary for jury or witness duty, temporary military duty (unless the absence is a full workweek), poor job performance, business closures, holiday closures, or sickness or disability when an employer doesn’t have a bona fide leave plan established.
Also, an employer can choose to be more generous than the FLSA regulations regarding pay deductions if the policy is applied consistently throughout the organization. A common example is allowing exempt employees to use their vacation time for absences instead of deducting salary. Deductions from accrued-leave accounts generally don’t jeopardize an exempt employee’s status.
Exempt employees often work more than 40 hours a week and can be required to adhere to a specific schedule for a variety of reasons, such as being available to other team members and to achieve an organization’s goals and objectives.
To avoid potential FLSA violations, HR professionals should ensure that employees are classified appropriately as either exempt or nonexempt. To be classified as exempt, employees need to earn at least a specified minimum salary and perform certain duties. An employer that is unsure of an employee’s FLSA status may err on the side of caution and classify the employee as nonexempt or seek legal counsel.
Being exempt typically offers more flexibility for work schedules. But if an exempt employee continuously fails to work a required schedule, the employer should follow its regular progressive discipline process rather than reduce an exempt employee’s salary.
Elissa Jessup, SHRM-CP, is an HR Knowledge Advisor for SHRM.