Exempt Employees on x-mas shutdown

shelby

Hello to all. Long time reader, first time writer. I'm sorry this is pretty long, but I'd rather give those of you with all the wisdom all the information I can!

We announced to our employees a year ago that we were going to shut down our facility (non-manufacturing,non-union) for the week of Christmas (12/23-12/27). We told employees that they could save 4 vacation days (because the 25th is a paid holiday)to cover for the week off. At that time we also gave them the option of letting them use their allotted vacation days during the year, knowing that if they didn't save 4 days for the Christmas shutdown, they would not be paid. This was clearly explained to all of our employees.

The issue I now have is regarding one of our exempt employees. Some of them used up all of their vacation days,knowing that they would not be paid for the four days off during that week. (Christmas day, as a holiday, would still be paid to them.)It is not an issue for them, however one exempt employee who used all of his vacation is now saying we need to pay him his regular salary for the week.

I have checked with our local (Indiana) wage and hour who told me that if they were 'ready, able, and willing' to work we cannot "dock them". Maybe I'm going out on a limb, but I feel we made it very clear in January 2002 that they had a choice about using or saving vacation days for the shut-down. They opted to use their vacation days during the year knowing that if they did, they wouldn't have any to use for the shutdown. We didn't have them sign anything, but we do have memo's etc. that explained the policy.

I now have approximately 18 exempt individuals who "saved" vacation days to cover for the shut-down. It is certainly not fair to them to pay those few who didn't save vacation days to pay them "extra days". Okay, I know this maybe hindsight, but where does common sense and fairness come in.

Does anyone have any insight, suggestions.......

Rockie

We have this same situation. We are a medical faciity and we are just having a skeletal crew work during the week of Xmas; all others are required to use PTO if they are not needed at work. Hourly people are docked pay if they don't have enough time; If our exempt people do not have enough time, we access future PTO instead of docking their pay.

Hope this helps!

Don D

What about the section of the FLSA that says if an exempt employee works not at all during the week, no pay is required? Seems to me the law says 'guaranteed salary for hours worked whether many or few'. None at all doesn't exactly fit between 'many' and 'few'. I would think that the employer, unless state law differs, would be within its rights to pay one holiday day and no pay for the other four since no work is performed that week by the exempts. That does not equate to 'docking' in my mind. Am I correct here, or is it just time for me to wake up? (7:30a.m.)

njjel

I agree with Don. No work at all does not require the employer to pay exempt staff. They COULD use any accrued time of course and they should be paid for the holiday if it is indeed policy.

Balloonman

Check Indiana law, but you should be good to not pay as there would be no work during the week. I would sit down and inform that person, and document the conversation. Also I would offer (because I am kind and warm hearted) to let them use some future paid time off that they will accrue. But I would have them sign acknowledging this so you don't have an issue again when they complaign that they have been shorted vacation.
My $0.02 worth.
DJ The Balloonman

cthr

You might want to check your state unemployment laws as well. Some states allow employees to collect unemployment for unpaid shutdowns.

Pork

Page 9,section 541.118 Defining the Terms-Executive, Administrative, Professional and Outside Sales tells you "Subject to the exceptions provided below, the employee must receive his full salary for any week in which he performs any work without regard to the number of days or hours worked." This is your "jail house employees" words in which he is pressing for his UNEARNED salary. Unfortunately, for this "jail house employee" he has an HR person that has access to a world of great information. I suggest you get a free copy of this bulletin, because if one takes the time and effort he/she could read and understand the very next sentence..."This policy is also subject to the general rule that an employee need not be paid for any workweek in which he performs NO WORK"!!! "DANDY DON" COULD BE RIGHT AGAIN! However, the very next subparagraph (1) confuses the situation. "An employee will not be considered to be "on a salary basis" if deductions from his predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. Accordingly, if the employee is ready, willing, and able to work, deductions MAY NOT BE MADE for time when work is not available." I believe the wage and hour folks would tell you if you announced and planned the plant to be totally shut down and that everyone would be expected to take leave in order to be paid, the employer would be in the right not to pay. Subparagraphs (2) & (3) allow for the payment of sick and vacation times when the employee is not available for work.

I believe, If your plant shut-down is a result of a fire, weather, or some other unplanned event, the employer would be required to pay or lay off the exempt employee employees. Hope this helped! Pork

pecohr

Don is correct, the ruling revolves around a work week. Any hours worked during a work week require payment. If no hours are worked during the work week than no salary is required to be paid. This is not a reduction is salary it is just a non payment for no services.

Hatchetman

The general rule is that an exmept employee need not be paid any salary for a week in which he or she performs NO work; otherwise he or she is to be paid the salary for the week unless permissible docking occurs as provided by 29CFR541.118a. I also have to disagree with Pork on his suggest interpretation of the provision on "ready, willing and able" to work. That provision applies in a situation where the employer may close down for part of the week, such as a holiday, but the employee works part or all of the rest of the of the week. The employer must then pay the regular salary for that week and MAY not dock salary for the day(s)it closed down during the week (unless it can show that the employee wasn't ready, willng and/or able to work on the days it shut down).