A consistent error I find when I take on a new client is that they improperly dock the pay of exempt employees. That is one Fair Labor Standards Act “no-no.” For the most part you CANNOT dock the pay of exempt employees, but there are seven (7) exceptions to that. Here they are the seven reasons you can dock an exempt employee.
.Absence from work for one or more full days for personal reasons, other than sickness or disability.
Absence from work for one or more full days due to sickness or disability if deductions are made under a bona fide plan, policy, or practice of providing wage replacement benefits for these types of absences. (AKA sick days.)
To offset any amounts received as payment for jury fees, witness fees, or military pay. (Check your state and local jurisdictions for rules on this. For example, in Georgia no one on jury duty can suffer financial harm as a result of serving.)
Penalties imposed in good faith for violating safety rules of “major significance”.
Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of written workplace conduct rules
Proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment. (This means that if someone’s first day is a Wednesday then you can pay them starting that Wednesday rather than for the full week. Or if their last day is a Wednesday, same thought.)
Unpaid leave taken pursuant to the Family and Medical Leave Act. (You can even do that in those small increments.)
Proper compliance is important
Notice the emphasis on FULL DAYS. This means you are not supposed to be deducting partial days from exempt employees, with the exception of FMLA time.
If you are improperly deducting you may in danger of getting a visit from a Wage & Hour investigator. The picture at the top of this blog is from the USDOL website. “We can help” is designed to help your employees report you. They are trying to get the word out that they are paying attention to many issues of the FLSA.
One thing is clear from all the activity going on is that you need to take how you handle FLSA VERY SERIOUSLY! The amount of money paid as the result from lawsuits, fines and settlements can be big. And I would hate to be the person in charge of HR when that happens.
I am just saying…..
Sign up for free HR Solutions updates via email