Loss of Holiday Pay for exempt salaried employee

Our factory policy manual states that to earn holiday pay, an employee must work the day before and after the holiday. What if the employee is exempt salaried ? One such employee called in July 3rd for personal reasons - he was not sick, but his wife was. Now the factory owner blew his lid, and decided that this employee did not earn holiday pay per the manual. So I was ordered to pay nine days instead of ten to this employee. And the owner decided that all exempt salaried sick days must be approved by him personally before being paid.
And what if the owner doesn't approve? This factory has no sick pay indicated in the policy manual. We are in California.


  • 4 Comments sorted by Votes Date Added
  • [font size="1" color="#FF0000"]LAST EDITED ON 07-15-02 AT 09:27PM (CST)[/font][p]Let's start from the beginning....

    The employee at issue is FLSA exempt. Under FLSA (29CFR541.118a), the employee is entitled to a full week's salary if he or she works any part of the week. However, FLSA does provide that an employer may dock from the weekly salary, the day's salary for any day the emplyee is off for personal reasons or for illness that is PAID under a sick leave policy, plan or practice of the employer.

    FLSA is very specific on what can be deducted from the employee's salary for the week. It does NOT provide for an employer being able to dock a day's salary because the facility was closed that day due to a holiday. In fact, the FLSA wording clearly indicates that the employer is NOT permitted to dock salary for that day if absence was caused by the employer closing the business for the day. Further, as I mentioned, if the employee worked in any part of that week, which I take was from Sunday June 30 through Saturday, July 6, then the employee is entitled the full salary for week except as allowed for the deductions for the absences I mentioned.

    If your boss doesn't pay the individual the full salary due (including the July 4th holiday), less legal deductions, then it is possible that not only the employee will be deemed non-exempt and be entitled to overtime but all other employees in that position will be deemed non-exmept and also entitled to overtime. The provision about docking pay due to the employer's closure of the business specifically states that an employee will NOT be considered on a salary basis (and therefore not exempt) if the employer docks from the predetermined weekly salary absences caused by the employer.

    If your boss corrects the problem by paying the exempt employee as soon as possible for July 4th, then DOL will not consider that the exempt status was lost. The longer he delays in reimbursing the employee, the more likely DOL will consider that the employer is treating him as a non-exempt. Your boss can "play games" and wait until DOL comes "aknockin'" before doing anything. But why should the boss cause morale problems for something he knows he'll have to fix?

    California regulations issued by the Industrial Welfare Commission in Wage Order 4-2001 do not change anything from the position expressed in FLSA.

    I think your boss is playing it "short-sighted." He should pay for July 4th. And he should dock pay for the personal absence on July 3rd and use whatever accrued personal paid time would cover the absence on July 3rd (I assume the employee has accrued time on the books). Although, that is not technically required under FLSA for personal time off in order to keep the exempt status. And then after having done that, your boss should move on with running the business.
  • I agree completely with Hatchetman. You might also ask your boss if he's running a company or a pirate ship.
  • Does he have Vacation or personal time he can use? We have the same policy and frankly it just seems to cause more problems than good. Good luck.
  • [font size="1" color="#FF0000"]LAST EDITED ON 07-17-02 AT 11:45AM (CST)[/font][p]CA is not exactly the right state for a shoot-from-the-hip employer to be messin' with somebody's pay. In his defense, but not to his credit, his assumptions about what he can do are based partly on his power trip and partly on his ignorance of the law. He's let his 'positive thoughts about his own power' spill over from being the guy in charge to violating clear and specific laws and regulations. Let's see now Dragon....I think your "HR Poll" post said you are 'able to leap tall buildings'. Good luck.
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