Salaried Employees Working On Vacation
6348386
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I am a Human Resource Manager responsible for Leave Monitoring and Administration at my Company. Salaried employees as we know, are not compensated for hours worked, but for the job that they are doing, allowing them to be paid for partial days worked. What happens when a salaried employee is on vacation for one or more days but, answers email and/or works on projects? It would seem to me that we have to give them back that vacation day, as payment for work done in accordance with FLSA regulations.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
It raises the question then of how we avoid reimbursing salaried employees who may need to call in and check in to their job regularly, like certain IT people, CFO's or CEO's. We do not offer Comp time as a means to make up for time lost. Does anyone have a policy about that at their job?
Comments
Most people let it slide. Technically, they are in violation about letting it slide.
The FLSA is quite clear about this where it defines the salary basis of pay. You have to pay salaried individuals the same amount each week without regard for <insert laundry list of things for which you can't deduct from salaried pay> except for full days of absence for personal reasons other than sickness except where such illness related absence is handled by a bona fide sick pay plan. Therefore, technically, when a person paid on a salaried basis does any work for the company on a given day, they are supposed to be paid their base pay for that day.
Most exempt employees check in on their day(s) off, handle email, and answer questions for co-workers and subordinates and don't see anything wrong with it and don't question the fact that their vacation pay is being used. That doesn't mean it's not a violation of the law to deduct from their vacation bank on the days in which they do that.
The FLSA rules do not speak specifically to vacation, but it does categorically state the conditions under which an exempt employee may be docked a day's pay. My interpretation is that if an exempt employee is checking and responding to emails, making business calls, and/or working on projects while on vacation, that is a bona fide workday.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
So, I was wondering if anyone had a specific policy guiding their exempt employees on this issue.
The FLSA rules do not speak specifically to vacation, but it does categorically state the conditions under which an exempt employee may be docked a day's pay. My interpretation is that if an exempt employee is checking and responding to emails, making business calls, and/or working on projects while on vacation, that is a bona fide workday.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
So, I was wondering if anyone had a specific policy guiding their exempt employees on this issue.
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If anybody has a policy about this, the policy will merely stipulate what the FLSA says or it will govern the conditions under which people work while they're on vacation. Because you can't have (and enforce) a policy that violates federal law you probably won't find much interesting in the pay arena. However, you may find a policy that says employees can't call in or do any work during their vacation days without approval. That would end up being analagous to the standard language about not working overtime without approval. In exactly the same manner, if employees do work on vacation days, you still can't dock their pay but, if you have a policy in place, it does mean you can discipline them for violation of the Company's work rule. I've never seen a policy like that but we have a good mix of talent and companies here.
There is a difference between docking pay and docking a vacation or PTO bank. The FLSA is only concerned with docking pay. You cannot dock pay if they do any work during the day. That is different than docking vacation. They are two separate entities.
According to several of my sources, the DOL has states that so long as the employee receives his or her full salary for the workweek, the employer can require the employee to use accumulated leave for absences of less than a full day without sacrificing the employee's exempt status.
I have not looked these up, but one of my sources references W-H Div. Op. Ltr. No. 1733, 4-15-94; W-H Div. Op. Ltr., 2-19-98; W-H Div. Op. Ltr., 4-23-99, W-H Div. Op. Ltr., 2-16-01.
Thanks for your input. I have already developed a Policy (see below) about working while on vacation which simply states that one must get authorisation prior to proceeding. However, as it stands if an exempt employee has vacation time available, when they take a vacation day it is paid to them accordmingly. However, the administaration of that may be tricky. I anticipate that as soon if we give a rationale for this new rule as if an exempt employee works while on vacation they must be paid hence people need authorisation before proceeding, it begs the question "what is considered work, how long do you have to work for it to be compensable, and are they going to be paid for the times that they have done this in the past?
Purpose: To ensure that employees use annual leave in the spirit that it was intended; a respite from work responsibilities.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Any employee that has access to, or is in possession of, any hardware or software with which any Una-Dyn related work can be performed, must [1]refrain from using it to engage in work-related tasks while on annual leave, unless there is a [2]clear understanding that this is a [3]directive from his/her supervisor. Plainly stated, annual leave is to be used as a respite away from work.
To manage the expectations of customers and colleagues who may be tempted to contact you during this time, use detailed out-of-office messages for your email response and your desk and/or company-issued cellular voicemail, outlining the duration of your absence and alternative contact information.
For example, an employee taking annual leave for any duration may consider creating out-of-office messages similar to this template: “You have reached Jane/John in the (department name) department. I will be away from the office from (include specific dates of departure and return). I will not be reachable by phone or email during this time. If you need immediate assistance, please call or email (give specific instructions here) for prompt attention.”
Any projects that an employee is working on prior to proceeding on leave must be delegated before time off begins, and picked up again as necessary, after leave ends. It is the responsibility of every supervisor to ensure that they are briefed on all existing workloads, deadlines, and deliverables of their support staff for the duration of the leave period. Employees and/or supervisors will be required to justify work conducted in a manner contrary to this policy.
If work is deemed necessary on an annual leave day, leave balances will be credited in accordance with job classifications. For example, hourly employees will be credited leave balances in fifteen-minute increments. Exempt employees will be credited leave balances in full day increments for any work conducted within the annual leave day.
Employees must be paid for all time worked, whether approved or not, and are not allowed to work "off-the-clock" work. "Off-the-clock" is work you may perform but fail to report. Even though, an employee may be tempted to do this as a show of good will, the law does not permit the donation of labor.
Supervisors who notice that employees are reading and responding to email, or checking in without proper authorization, must ensure that this practice stops immediately as the offender(s) may be subject to disciplinary action up to and including termination.
[1] All Company issued hardware or software that is expressly classified for business use should only be used in that capacity. If you have access to your work email via your personal computer, or cell phones they must not be used for work-related activity during this time.
[2] A note in the comments section by the supervisor validating the employee’s time, stating that the employee is signing on early per their instruction is considered a clear understanding.
[3] Supervisors requiring employees to engage in work – related tasks while on annual leave must have justifiable business reasons for doing so, and do so only as an exception in limited circumstances.
Thanks for your input. I guess what I am attempting to clarify is not about docking pay exclusively, but reimbursing a PTO bank. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
For instance, An exempt employee works Monday to Thursday, but takes a vacation day on Friday, and does work from home, or blackberry. Do we pay that person for the Mon to Thursday regular pay and reimburse the PTO bank for the Friday that they would have lost if they had not done any work?
Conversely, if an exempt employee is out of leave (in this case there is no vacation bank to reimburse), but has to take one full day off anyway, we would typically only pay for the other days worked even if they were partial days. In this case do we pay the full day lost as they had no leave to take , but answered emails or worked on a project while sick at home?
Do you understand what I'm getting at?
If an exempt employee is out of PTO and works part of a day from home (checks email, answers work related inquiries, etc), then yes, you would have to pay him/her for the whole day. The only time you can dock (PAY) is when they take a full day off. You can pretty much always dock PTO.
My favorite DOL opinion letter on this topic is : http://www.dol.gov/esa/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.pdf that states specifically "...As stated above, the one or more full-day deduction requirement applies to deductions from an employee’s salary, as opposed to a leave bank ..." which is a little newer than the ones that LadyAnn cited.
According to several of my sources, the DOL has states that so long as the employee receives his or her full salary for the workweek, the employer can require the employee to use accumulated leave for absences of less than a full day without sacrificing the employee's exempt status.
I have not looked these up, but one of my sources references W-H Div. Op. Ltr. No. 1733, 4-15-94; W-H Div. Op. Ltr., 2-19-98; W-H Div. Op. Ltr., 4-23-99, W-H Div. Op. Ltr., 2-16-01.[/quote]
Absolutely, you can deduct from leave banks for partial day absences according to DOL, but when the leave bank is empty, you still have to pay them, whether you let their leave bank go negative or simply pay them anyway when their leave bank is 0. In one of the prior discussions we had on this, I did find a recent legal review that indicated that not all circuits buy into the DOL's ruling on this partial day deduction stuff. Know your circuit.
SHRM members should be able to find the blurb below easily enough in the FLSA toolkit and it would be helpful if someone with BLR's compliance materials could post a blurb or a link here as well.
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Additional compensation
Provisions of the new regulations and comments in the preamble support two generally accepted propositions concerning additional compensation:
• That an employer generally may give exempt employees additional compensation over and above their salary—even if the extra is paid on an hourly basis—without jeopardizing the employee’s salaried status.
• That an employer may deduct from exempt employees’ vacation, paid time off or benefit time on an hour-for-hour basis.
While these two propositions have now been fully endorsed by the DOL (and by the courts as to payments in addition to salary), some courts have been reluctant to accept hour-for-hour deductions, and it remains to be seen whether they change their views in light of the DOL’s recent pronouncements.
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That document was last updated in 2006 and I am not aware of anything more current than that. Anybody have something more recent?
Knowing what the DOL has said, I think the OP is asking what everyone does if you have a mgr who is supposed to be off work (using a vacation day) but ends up doing work. Are you making the employee still use some of his/her vacation time?
Our policy is if the employee just calls in to check messages, etc., yes, we still hit the PTO balances for a full day. If it is for more than an hour or two, we decrease the hit to the PTO bank (i.e. credit back the time worked). But the exempt employee bears the responsiblity of telling me that they worked on time that was shown as TO. Otherwise, I do not look to credit.
And actually our holiday policy is the same. For example quite a few of us worked Good Friday even though it was a company paid holiday. In that case, we credited 8 hours to each person's PTO bank (along with paying hours actually worked for the non-exempt since we were already paying a full salary to the exempts).
At my company, if an exempt works what would be considered a nominal amount during a vacation day, it's still a vacation day. Like checking voice mail, answering e-mail, etc. But if they do any substantial work or get tied up with a conference call, etc. then they use vacation for part of the day and charge labor to part of the day. So say they get on a conference call for 2 hours. They'll charge only 6 hours of vacation for that day, the other 2 hours are charged to labor.
For any of you subscribe to the HR Daily Advisor from this website, today's topic is talking about working while on vacation.
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It is my understanding that if you assess exempt employees by any hourly parameter, like the one you indicated, then we are treating them as hourly, and we may be liable to lose our exemption for similar situated employees over the period of time in question. This means having to pay overtime for the period assessed. Either it's a full day’s pay for time worked or not. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
It is my understanding that if you assess exempt employees by any hourly parameter, like the one you indicated, then we are treating them as hourly, and we may be liable to lose our exemption for similar situated employees over the period of time in question. This means having to pay overtime for the period assessed. Either it's a full day’s pay for time worked or not. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
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No, that's not true. DoL even has several opinion letters. You can certainly use PTO in any block of time your timekeeping system can handle. Ours is on 1/10th of an hour. So if an exempt employee leaves 6 minutes early, they charge 1/10th of an hour of PTO. We've withstood several DoL audits.
Where you could get into trouble is if you dock actual pay from an exempt employee. *note - actual pay is NOT PTO. You can dock PTO banks however you'd like, just don't make the weekly salary less than their usual weekly salary. How you pay the salary is entirely up to the company.
It is my understanding that if you assess exempt employees by any hourly parameter, like the one you indicated, then we are treating them as hourly, and we may be liable to lose our exemption for similar situated employees over the period of time in question. This means having to pay overtime for the period assessed. Either it's a full day’s pay for time worked or not. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
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No, that's not true. DoL even has several opinion letters. You can certainly use PTO in any block of time your timekeeping system can handle. Ours is on 1/10th of an hour. So if an exempt employee leaves 6 minutes early, they charge 1/10th of an hour of PTO. We've withstood several DoL audits.
Where you could get into trouble is if you dock actual pay from an exempt employee. *note - actual pay is NOT PTO. You can dock PTO banks however you'd like, just don't make the weekly salary less than their usual weekly salary. How you pay the salary is entirely up to the company.
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I don't know why everyone is anxious to skip this important detail: SHRM has an active, current white paper that says that not all courts buy into the DOL's interpretation that partial day deductions from leave banks are acceptable under the salaray basis of pay. The larger the employer, the more attractive this is as a rain maker for plaintiffs' attorney. All that you need is for an attorney to argue that the DOL has overstepped it's authority in that there was no gap in the law about what the salary basis of pay means to potentially take you to trial or force you to settle. I would just check with counsel about how your own circuit has ruled on this matter before jumping in. It could still go to the supremes and end up reversing your circuit's holdings.
6348386: that was the old rule. Under the new regs, partial day deductions of PTO banks for partial day absences are OK. There is a question as to whether or not this part of the new regs will fly in court.
[quote user="IT HR"]Let's put a humanistic side to this for a minute and put yourself in the employees shoes. If you are someone that is working say 60 hours a week and you leave 6 minutes early, and then get docked from your PTO for the 6 minutes, you are probably going to be a little bit upset. I understand that you have to have policies because you will have people work 40 hours in 4 days and try to take off every Friday during the summer without using their PTO. But in my eyes docking for 6 minutes at a time is a little harsh, especially if the employee can show they are working long hours for the employer. I do think that these DOL interpretations will get overturned in the courts. It will start with a sympathetic jury that will say the employer is getting enough time from the employee to not have to dock at such small increments and then it will go up the court "food chain" from there. [/quote]
We don't dock. We use time from their PTO bank. We don't do it if they work less one day. They can always make up that time. Because we're a federal gov't contractor we MUST log in for every minute of work. We don't have any way around it. So if an exempt leaves early one day they usually work more somewhere during the week to make up for it. I'm sorry if my original post wasn't clear on that, I didn't mean to give the impression that if you're out a few minutes you have to use PTO with no chance of making it up.