...Exempts

nikkiherndon

We are shutting down for two weeks (week of Dec 21 and Week of Dec 28). Now, the week of Dec 21 we will probably issue our 3 floating holidays and then there is the 25th which is a holiday for us as well.

Then, the week of Dec 28 we will have one holiday (Jan 1).

Now, given the above, and given that Holidays, vacation, PT, floating holidays are considered "as if the Employee were on the premises", wouldn't an exempt EE be paid for both of these weeks in full?

Help!

heather1027

Hello Nikki,

We need to know the state in which these furloughs will be happening to determine the state regs on notification and such. 

The feds look at hours actually worked. Here is your projected workweeks:

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> Monday	Tuesday	Wednesday	Thursday	Friday
21.Float Holiday	22.Float Holiday	23.Float Holiday	24.Shutdown 1	25. Paid Holiday
28.Shutdown 2	29.Shutdown 3	30.Shutdown 4	31.Shutdown 5	1.Paid Holiday

Shutdown 1 thru 5 doesn't have to be paid unless the employee works - even so much as answers a phone, checks an email or voicemail.  These days can be deducted from their PTO if they have it.  If they don't have it and your company allows the PTO to go negative, then you can do that.  If they don't have PTO, then they don't have to be paid (as long as they don't work!). They could apply for UC.

 

But the federal regs can be found at 29CFR541.602 and are as follows:

1. "...an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked."
1. meaning to say the employee has to be paid the full weeks pay even if they answer a phone message or check an email during any type of shutdown period.
2. Now - the feds don't care how they get paid - AS LONG AS THEY GET PAID.  Therefore, you can require them (unless state regs have rulings on this) to use PTO/Vacation/etc during for any period of shutdown even if it's voluntary or unvoluntary on the employee's part for time not worked during that week.  Stated again, if the employer requires a shutdown for any time frame (a week or less) and the employee is able and willing to work, the company can still deduct from the employee's PTO bank for those days as long as the employee gets paid.  Their pto bank can go negative if your company policy permits it.  If the employee doesn't have PTO and they have worked at all (even checked an email or voicemail) during the workweek then they have to be paid.
1. There are several letters written by the DOL which make this very simple to understand.  A nice summary of them can be found at http://www.wageandhourcounsel.com/tags/shut-down/  this site has links to the letters which are labeled FLSA2009-2, FLSA2009-14 and FLSA2009-18.
2. "Exempt employees need not be paid for any workweek in which they perform no work." 
1. If there is no work performed during a week, and there is a shut down even at the employer's request (and the employee is willing to work), then the employee does not have to be paid.  As long as they performed no work at all during that week.  If they have PTO, then great they can use it.  If they don't have PTO then it's time to begin doing the UC paperwork for that week.

 Another few words of caution is added on the above mentioned site, which is very important: 

1. "The DOL advises that 'salary deductions due to a mandatory reduction of hours worked for short-term business needs' are exactly the sort of activities encompassed in the phrase 'by the operating requirements of the business.' Any deduction in this situation - even one an employee chooses - destroys the exemption."
1. Ex: if  long term change from 5 day to 4 day workweek and reduction in wages =        OK as per DOL
2. Ex: if short term change from 5 day to 4 day workweek and reduction in wages = NOT OK as per DOL
2. If a salary employee doesn't work during a shutdown period and is not paid during that time, it's important to make sure they do not go below the minimum federal earns as an exempt employee.