Part-time Exempt Employeee?

Cal HR Vet

We have a salaried exempt female employee whose physician has requested she be placed on a 20 hour workweek rather than the normal 40 hours due to her pregnancy. This situation will last for approximatley 3 months, before she goes on full leave of absence. Can you tell me if she has to be paid her full salary under these circumstances, even though in effect she has requested to go into a part-time status?

Whirlwind

[font size="1" color="#FF0000"]LAST EDITED ON 10-14-05 AT 00:23AM (CST)[/font][br][br]I have searched for the answer to this very question in the past, with no luck. I hope someone will answer it for both of us. Failing that, I'm inferring that you cannot prorate the salary of an exempt employee for part-time work; however, I believe there is a work-around: Simply re-classify her as non-exempt. I don't think the FLSA compels us to classify a position as exempt just because it meets the criteria. Nor does it keep us from paying non-exempts as salaried rather than hourly. But, you must pay for all hours worked, and pay OT should she ever go over 40. So, you would pay her half her salary, track her hours worked as you would any non-exempt, and pay for the extra hours by converting her salary to an hourly rate when necessary. Say, for example, she defies dr.'s orders and works 22 hours in a given week. You would have to pay her for the extra two hours based on what her salary would be if converted to an hourly pay rate. Does that make sense?

Now I'll sit back and wait for someone to tell both of us that I've overlooked something either obscure or glaringly obvious. Please do, because I'd really like to know!

p.s. Welcome to the Forum!

HRinFL

My interpretation has always been if your exempt, your exempt. Whether I work 55 hours this week, or 35 hours this week, I am exempt, it does not matter, as long as I am meeting my deadlines and turning out good work product. I have taken the stance that for weekly exempt, one day worked entitles to their pay for that week. While I may charge the time to PTO, STD, etc. Monthly exempt the same way, one day per week, whole check, designating the time according to the absence type (STD, etc.)

If she cannot work a full schedule due to complications with her pregnancy, she should be on FMLA. The time she misses each week would be FMLA absences and you would handle those according to your policy. She would then get paid according to how exempts are handled under that policy. Additionally, the hours she missed would count toward her 480 hours and would keep her from having this time off and then having all twelve weeks available after child birth. I would give her the FMLA paperwork to give to the doctor and start the clock.

crawfod

I like Whirlwind's solution of re-classifying her as Non-Exempt. This is the cleanest and fairest method for her and your company. When she returns to full duty, you can re-classify her again.

Another angle however would be to determine that she is on FMLA, if she is qualified. FLSA allows deductions for time missed for exempt employees on FMLA, so you could reduce her salary in half. The bad news in your case is that you said she would be part time for 3 months and then off full time for a period after that. So, if you determine her to be on FMLA now, you will force her to use up 6 of her 12 week entitlement while she is PT, thus leaving only 6 more weeks of FMLA. Maybe that will still work out for her, but if she is planning on the entire 12 weeks after this 3 month period, then this angle would be worse for her.

Either way, you shouldn't have to pay her more than the 20 hour wage. If she is entitled to Sick Leave Pay, she could supplement her lost income that way.

Employers can reduce exempt employees workweeks, say from 40 to 32 hours, with a commensurate reduction in pay. However, the $455 minimum salary threshold for exempts is an absolute requirement. But my thought on that is why would you classify a part timer as Exempt, when there would be little likelihood of having to pay overtime wages, which is the main reason employers use the exempt status in the first place?

Shadowfax

I agree wi Whirl. There is nothing in the statutes prohibiting you from putting the co. president on an hourly wage. Exempt status is a prerogative of the employer, not the ee. Change her to hourly. The hourly rate is not necessarily the salaried rate divided by 40. One would presume the salary made some reference to additional responsibility.

Crout

This looks like plain, old, intermittent FMLA to me, which as stated above does allow you to reduce her salary. Are there other employees in her job category? If so, I would be very hesitant to state that her duties are non-exempt.

Shadowfax

Crout. I don't disagree that FMLA is an option, but that was not the poster's question. I am interested however in why you would be hesitant to make the ee non exempt. Do you see something in the act that makes you think an emp/ee who's duties are exempt could not be paid hourly?

dchr9203

[font size="1" color="#FF0000"]LAST EDITED ON 10-14-05 AT 01:24PM (CST)[/font][br][br]As long as you mutually agree on the number of hours, yes you can have a part-time exempt/salaried employee.

Shadowfax

I agree you may have part time exempt, providing you pay attention to the minimum salary and the duties. I also think you may employ the million dollar a year company physician on an hourly basis if you choose.

DeidreFR5

I have had this same instance come up - we agreed she would work 20 hours for half her usual salary and remain extempt. We were able to do this since her halved salary was still above $455. If it weren't, she would have gone non-exempt on a temporary basis.

crawfod

I think we all agree the FMLA exempt rules would be a good option, but what if this employee is not eligible for FMLA? Then I think going the non-exempt way would work. I did consider what I think Crout was saying, in that would it be wise employee relations if you had two or more exempt employees with identical duties and working conditions to re-classify one as non-exempt and not the others?

My conclusion was (a) there's no rule against it, (b)it's only for a temporary time period, (c) the PT employee is now no longer performing equal duties and therefore subject to being reclassified, and (d) the PT emp will not be negatively affected because she will still receive the same income.

Crout

Allow me to try and clarify my thinking....some days the thinking is less clear than on other days. I would be hesitant to re-classify her duties as non-exempt IF.....IF there are other employees in the same job category. Why? Because that re-classification could be used by that other group of employees to challenge their exempt status. The duties in that job are either exempt or non-exempt, and my feeling is that unless the duties change you should keep her status intact.

allenb

You guys may be missing something. The Wage and Hour Administrator has set forth detailed rules concerning the deductions that an employer may make from the salaries of administrative employees without jeopardizing the exempt status of the employees. see 29 C.F.R. Sec. 541.118. One of these is that an employer can make deductions for absences of a day or more because of sickness or disabilities if the employer has a plan, policy or practice providing for compensation for loss of salary due to sickness or disability. Thus, if you provide 10 paid sick days and an exempt employee took off 11 days in the year, the 11th day is noncompensable regardless of salary. And, by the way, one of the earlier responders sems to imply that you can have an hourly exempt employee. I thionk this would violate the salary basis test.

lynn2008

FMLA does pre-empt Wage and Hour, so you can reduce pay for days missed covered under FMLA, but I believe that if they work a partial day, you must pay them for the full day.

The solution one responder had of changing her wages to still be above the minimum for exempt sounds plausible, but once you do this document it for future similar situations.

You can call your local State/Federal DOL Wage and Hour office. Clearly document your conversation and do a registered confirmatio letter with that office. They do crawdad sometimes.

The comment from about sick days, or STD/LTD would apply, so if you can not work out an accommodation (not talking about ADA either) for the PT status pay the sick pay or put her off on unpaid status.

allenb

Please let me clarify: An employer who provides FMLA leave on an intermittent basis to an exempt employee may make deductions to the employees salary for any hours taken as intermitent leave without affecting the employee's exempt status. See 29 C.F.R. Sec. 825.206

Shadowfax

I keep thinking I must be missin g something. Why is this so complicaated? What is the advantage to the em/er of exempt aside from the o/t issue? If the em/ee is not only going to work no o/t, but will only work 20 hours per week, why even mess around with exempt? To me, part time has always indicated hourly - not because any law says it must - it just makes more sense from the em/er's point of view. So what if the duties indicate it could be exempt if the em/er wanted it to be? And in this case, even if others with the same dutioes are exempt, well, they are full time and this position is part time, and the FLSA default is hourly, why all the angst? What exactly dictates any other result if the em/er wants to go hourly?

Crout

I don't see too much angst, it looks more like a discussion to me. FLSA has two tests: duties and salary. Full time vs. part time is not one of the tests, so far as I know. If it is, please show me. They want this person to work part time hours at a reduced salary. It seems to me that they can skin that cat through more than one method (as mentioned above) without suddenly classifying her duties as non-exempt.