Exempt Suspension

LivindonSouth

One of our regular contributors, LarryC, pointed out today that in order to suspend a salaried employee, the employer is required to have a written policy on suspension in place. He cited chapter and verse of the federal regulations. I would like a lawyer or two, maybe even our state editor, to weigh in on this one. What if the employer has no handbook or written policies? Is it really reasonable to suspect that the federal government would get engaged if such an employer were to suspend without a policy in place?




Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

LarryC

Actually Don, I stated that the written policy has to cover the MISCONDUCT for which you are suspending. The following is my post in the Wage and Hour section, word for word:

"As long as you have a written policy covering the misconduct and is applicable to all employees, you may suspend exempt EE's in full day increments. This allowance to the FLSA was effective last Aug.23, 2004."

Interesting post on your behalf to further the discussion here. As I also said earlier, I would prefer it to be the way that you stated it. I look forward to some good input.

LivindonSouth

Not splitting hairs, but my question is still the same. Do we really anticipate that the government would have an interest in enforcing such a standard in light of the thousands of employers who don't even have handbooks or written policies? Most of US on the Forum are mired in our written policies and procedures; however, we must realize that there is a whole other world (of employers) out there who do not have them and there are even HR people who never heard of the Forum. I would hate to think that this obscure government standard could actually reverse a job termination.




Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

Peyton Irby MS

29 cfr 541.603 prohibits improper deductions from an exempt employee's salary. improper deductions can cost you the exemption for that employee and others in the same job category. the regulations are silent as to whether an employer must have a written policy delineating when an exempt employwe may be disciplined with a full day's absence without pay. HOWEVER, you must have a "safe harbor" provision for an employee to have a complaint and resolution procedure when the employee believes improper deductions have been made. it would clearly be a better practice to have a policy advising exempt employees this can happen (communication is a good thing), and a policy can serve as a guide to your managers on the use of this type of discipline.
Peyton Irby
Editor, Mississippi Employment Law Letter
Watkins Ludlam Winter & Stennis, P.A.
(601) 949-4810
[email]pirby@watkinsludlam.com[/email]

LivindonSouth

"the regulations are silent as to whether an employer must have a written policy delineating when an exempt employwe may be disciplined with a full day's absence without pay."

Peyton; is there a conflict between that statement and the one in quotation marks in post no. 1, above? Maybe the real question is, do you, as an attorney, think unpaid suspensions of exempt employees, in the absence of written policies, would be defensible in court?

crawfod

Below is what I copied from the DOL website (29CFR 541.602(b)(5):

(5) Deductions from pay of exempt employees may be made for unpaid disciplinary suspensions of one or more full days imposed in good faith
for infractions of workplace conduct rules. Such suspensions must be imposed pursuant to a written policy applicable to all employees. Thus, for example, an employer may suspend an exempt employee without pay for three days for violating a generally applicable written policy
prohibiting sexual harassment. Similarly, an employer may suspend an exempt employee without pay for twelve days for violating a generally
applicable written policy prohibiting workplace violence.

My understanding of such suspensions has been that they apply to "serious" workplace misconduct, such as sexual harassment, violence, drug or alcohol violations, or violations of state or federal law. Profanity, such as mentioned in the other post, would not seem to fit, nor would any performance or attendance violation, regardless of any written policy. The focus is on misconduct only.

While I agree with Don that many employers do not have detailed written rules (Our own city rules do not apply to Dept. Heads, only the hourly workforce), most wise employers surely have written policies on the big topics, such as sexual harassment, and I thought that was where suspensions for exempts applied.

Bottom line to me is suspending an exempt employee without pay for anything less than a major uncontestable offense is a serious step, one fraught with legal issues, let alone employee relations with someone of high value to the organization.

LivindonSouth

Before recent revisions, the only incident I recall that could result in an unpaid suspension of less than a week for an exempt ee was a safety violation. As I understand it now, the exempt ee can be suspended for any reason a non-exempt can be suspended for. Not limited to those you mention. But perhaps that's the rule in your city government structure.

And as far as "employee relations with someone of high value", actually suspending an exempt employee would probably tremendously improve overall morale in the organization, particularly among the non-exempt who find out it happened.




Disclaimer: This message is not intended to offend or attack. It is posted as personal opinion. If you find yourself offended or uncomfortable, email me and let me know why.

LarryC

[font size="1" color="#FF0000"]LAST EDITED ON 07-15-05 AT 01:26PM (CST)[/font][br][br]David, I would have no problem suspending ANY employee for profanity, exempt or non-exempt, if after several warnings the profanity continues. It's part of our written policy which applies to all.

As far as attendence goes, I agree with you. I just can't see giving someone time off as punishment for taking too much time off. I would move right to termination which the employee would know is the next step from the last warning.

Performance issues tied to expectations per the job description, I agree, are not catagorized with misconduct. The person just plain can't do the job. So you say, "Nice try and see ya'
later."

crawfod

Don and Larry, I didn't say it well, but I meant to offer an interpretation for suspending an exempt employee without pay. I agree with Larry that "suspending" any employee for profanity or other violations is okay, but I think suspending an exempt employee WITHOUT PAY (Docking) for certain violations is a messier matter.

It's the docking of pay from exempt employees that concerns me. Discipline including suspension should not be a problem, but what kind of punishment is it for an exempt employee to be sent home for three days with pay? Other than the embarassment and the falling behind in their work, a three day "vacation" may not seem so bad.

I subscribe to Thompson Publishing Group's FLSA handbook (no plug intended) and they mention an interesting DOL Wage and Hour Opinion letter dated 3/30/94 that says DOL supports the alternative to suspension without pay is to reduce the employee's leave banks by a day or days. Quoting from the letter "In our view, such a practice would not affect the salary basis of payment described in 29 CFR 541.602." Any employer questioned about such a practice could point to the cited opinion letter and argue that it has a good faith defense to any challenge.

Peyton Irby MS

the two regulations are not in conflict. i probably should have clearer in my initial post. to suspend without pay, there must be a written policy forbidding the conduct for which you are suspending. this is your general rules of conduct and you do not need a separate policy for exempt employees. there will almost always, as you know, be a judgment call as to imposition of any discipline. i noted the posts regarding use of profanity. obviously, a welding shop may differ from a bank as to the workplace rules and their enforcement.
Peyton Irby
Editor, Mississippi Employment Law Letter
Watkins Ludlam Winter & Stennis, P.A.
(601) 949-4810
[email]pirby@watkinsludlam.com[/email]

HRLASS

This is the way I had interpreted the section of the new FLSA regulations quoted above. (Don, note "generally applicable written policy" stated 2-3 times.) However, I have an additional question.

We have written policies relating to sexual harassment, workplace violence, personal conduct (the most frequently violated 3) and many others. Some state that our positive discipline policy applies, others specifically state that discipline is outside that policy. Our positive discipline (called "progressive" discipline by other companies) outlines various levels of disciplinary action. Suspension has never been included.

Are written policies outlining "forbidden conduct" enough to suspend under this section of the regulations, or must you have a policy stating that suspension for this behavior is an option in order to suspend?

crawfod

HRLass, I'm going to be nit-picky today cause it's Monday. First, to clarify your question, suspending exempt employees without pay is I believe your main focus, versus simply suspending exempt or non-exempt employees. I see the pay issue as the distinguishing difference of this thread.

Second nit-pick, you referred to "policies outlining forbidden conduct", separate from sexual harassment and workplace violence. The word outlining makes it sound like specific offenses may not be mentioned literally, such as profanity at work, public drunkenness, domestic assault, etc. My point is that conduct related offenses that are not specifically stated I feel leave you vulnerable to dispute when you suspend an exempt employee without pay. However, sexual harassment and violence policies generally are written with some teeth in them, and the line which someone crosses is a little clearer, in most cases, and therefore easier to defend disciplinary action.

Of course, we both know that a policy with wording such as "discipline up to and including termination" is your safest wording, which would certainly include suspension. I believe the FLSA would uphold suspending an exempt without pay for sexual harassment and workplace violence as long as your policy prohibits such behavior, even without the "up to and including" phrase. "Forbidden conduct" seems grayer to me. But why not include the phrase and remove that argument from the lawyer's head?