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Thread: legal experts: salaried exempt vs. non-exempt employees

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    Maple SERP savafan's Avatar
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    legal experts: salaried exempt vs. non-exempt employees

    I'm trying to help out my staff in a somewhat disagreement with our company where they feel the company is being shady, and I in middle management am not really sure. I've looked over the FLSA, and I'm sure my answer is in there, but I'm not sure what it is.

    Is it legal for a company to dock salaried employees for hours not worked? Seems to me that is against the definition of salary and falls under the hourly paid employees. Our company has both salaried and hourly employees, but I really can't distinguish the difference except that the salaried employees are expected to work more hours without compensation, but if they miss time for illness, maternity, or bereavement they don't get paid for that time at all.

    Does this seem right?
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    Member LawFive's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    I'm not a legal scholar, but this doesn't make much sense to me. I always thought the whole point of having salaried workers was that companies knew their labor costs. If the employee can finish their assignments in less than 40 hours, then they "win" and maybe duck out early on Fridays...if not, the work is stil done but the company doesn't incur extra expense for it. In exchange for that guarantee, company continues to pay employee even during reasonable absences.
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    Re: legal experts: salaried exempt vs. non-exempt employees

    Salary exempt means you get paid based on a 40 hour schedule, it doesn't matter if you work 60 or 30, pay is the same. With these jobs, the rules are usually more laxed. If you take a 1.5 hour lunch, who cares. If you can get everything done and leave at 4:30, that is fine to. It's about getting the work done, doesn't matter how long or how little it takes. I have never seen an instance where a salary exempt employee is docked for not working 40 hours.

    Salary exempt employees SHOULD have paid time off as well.
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    First Time Caller SunDeck's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    I'm curious what is meant by "hours not worked".
    Usually with an exempt position, the expectation is that an employee probably works more than the 40 hours per week, which is why the Feds created the distinction in the first place; to allow employers to get more work out of employees in management in times of need without having to pay them more.
    Well, maybe that's not exactly the reason, but that's the way it is viewed at every place where I have been an exempt employee.

    Anyway, I am curious because as an exempt employee I have probably never worked under 40 hours a week. So my first reaction is that the employer just saying to those exempt employees "You're not pulling your weight".

    Is it legal? Well, I think that depends on your state laws, too, but my initial guess is that there is nothing illegal about reducing an employee's pay, which is really what this sounds like. But I'm not a legal mind- just another middle manager like you Sava.
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    Re: legal experts: salaried exempt vs. non-exempt employees

    Yeah, I don't think anyone is looking to slack off and work less than 40 hours a week...but they also don't want to be taken advantage of by the company they work for either.
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    Score Early, Score Often gonelong's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    I am a salary exempt employee. Our work periods are 2 weeks (80 Hours) and we have "time off" (personal days, holidays, or vacation) automatically deducted from our balance for any time period that is under 80 hours. While this seems "fishy" at first I could care less as the 80 hour time-card gives me all sorts of flexibility to take time off as needed (1/2 day here 1/2 day there) without dipping into "time off" days. (I can also telecommute on a limited basis - like on snow days).

    From what I understand, my manager would have the discretion to pay me for 80 hours even if I only worked 60, however, to my knowledge this has never been done at our site.

    I work for a large employer who would be insanely foolish to be breaking the law in such matters, so I am pretty comfortable in saying this is legal in Ohio.

    GL

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    smells of rich mahogany deltachi8's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    If they are salaried, they are paid to do a job, not for the time to do that job. They shouldn't be docked for arriving late, long breaks, etc. Since 2001, as I understand it, the federal rule has allowed exempt employees to use partial vacation and sick leave days so long as there was no loss of pay on payday. So, if an exempt employee takes a half day off, the half day of accrued leave can be docked from the accrual bank – never from the paycheck. The person can not actually receive a lower paycheck, even if they do not have time accrued in their "bank" to take off. Many companies have a policy that requires time off to be taken in blocks on 1/2 or a full day.

    This does not mean a company can not discipline an employee, however, for taking excessive time off, being late, long breaks, etc. Yes, an employee can be fired for these infractions, exempt or not.

    Also, many states may have different laws regarding this.

    However, the interesting question is if they are truly exempt under the law. That will depend on duties, etc.

    If they are not exempt, they would be due overtime for any hours worked over 40 in a week. And yes, that can be a retro decision if made by wage and hour enforcement.

    As a former HR Director, I can tell you Wage and Hour audits are no fun. (I am not suggesting that these employees involve a government audit, but rather they should find out if they truly meet the definition of exempt employees.) MANY companies make mistakes regarding exempt/non-exempt definitions and end up being tagged with large fines and back pay issues.

    You may want to look at the employees duties and match them up under the definition of exempt employees. If you think they are not exempt, you may want to bring that up to the HR Department - not to cause them a headache, but rather to try and save them from a very large one down the road -- Unhappy employees who feel they are being taken advantage of will make that call eventually to the wage and hour people.

    Edit to add: I don't currently work in HR and have never worked in Ohio, so take the above with that knowledge in mind.
    Last edited by deltachi8; 01-22-2009 at 12:14 AM.
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    Member Sea Ray's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    I would think the company could and should define what is expected of each employee. If it says to salaried employees, "we expect you to work 40 hrs a week and if not this is how we'll handle it" then fine. But if it's not spelled out that way, I don't think they should be able to dock pay based on hours worked. I think that's what you should be pursuing: a written policy.

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    smells of rich mahogany deltachi8's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    Quote Originally Posted by Sea Ray View Post
    I would think the company could and should define what is expected of each employee. If it says to salaried employees, "we expect you to work 40 hrs a week and if not this is how we'll handle it" then fine. But if it's not spelled out that way, I don't think they should be able to dock pay based on hours worked. I think that's what you should be pursuing: a written policy.
    Policies are good, but the law is specific on what duties fall under exempt employee status.
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    Member RedsFan75's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    Our company recently installed a time tracking system for the exempt employees and we were told to make sure we had all the appropriate 80 hrs accounted for or it would reflect in our pay. However for the same token if we work say 85 hrs in that period we are not afforded any additional pay.

    That doesn't seem right to me anyway.
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    Re: legal experts: salaried exempt vs. non-exempt employees

    Quote Originally Posted by RedsFan75 View Post
    Our company recently installed a time tracking system for the exempt employees and we were told to make sure we had all the appropriate 80 hrs accounted for or it would reflect in our pay. However for the same token if we work say 85 hrs in that period we are not afforded any additional pay.

    That doesn't seem right to me anyway.
    For an exempt employee, it isn't right. It's not supposed to be about the time. If they want to treat you like an hourly employee I'd ask to be paid liked one, with overtime.

    Honestly, I'm not sure I'd accept a salary exempt position anymore unless the salary was fairly high, they abuse it to death these days and expect 50+ hour weeks every week.........for nothing.
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    Be the ball Roy Tucker's Avatar
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    Re: legal experts: salaried exempt vs. non-exempt employees

    In the places I've worked for exempt employees, chronic missed time (<40 hrs.) that is not allowed time off (e.g. vacation, sick time, holidays, etc) is a performance issue and subject to disciplinary action. Like getting your butt fired.

    I've never heard of docked time for exempt employees. I'd think this is thin ice for the employer (see link).

    http://www.allbusiness.com/human-res.../490582-1.html

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    Re: legal experts: salaried exempt vs. non-exempt employees

    Quote Originally Posted by Reds4Life View Post
    Honestly, I'm not sure I'd accept a salary exempt position anymore unless the salary was fairly high, they abuse it to death these days and expect 50+ hour weeks every week.........for nothing.
    I would be thrilled to only have a 50 hour week right now. Salary exempt sucks.

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    Re: legal experts: salaried exempt vs. non-exempt employees

    Quote Originally Posted by Redlegs23 View Post
    I would be thrilled to only have a 50 hour week right now. Salary exempt sucks.
    I resigned from my job in December, that was salary exempt. The "normal" week there was 50+ hours (including saturdays). The worst part, no laptop and ability to work from home, they were all in office hours.

    Not worth it, ridicilous. Learned my lesson there, anymore exempt jobs for me are going require a very hefty salary because they expect exempt employees to have no life but thier job.
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