Whew! That’s a mouthful of acronyms, but it means we have some great information for you. As an employer, you might be facing unprecedented challenges to keep your business running and your employees paid. If you’re furloughing employees, or reducing hours and/or leave, you need to be sure you’re within legal guidelines. The U.S. Department of Labor (DOL) has published a list of Frequently Asked Questions (FAQs) to help employers stay within the guidelines of the Fair Labor Standards Act (FLSA).
Here’s how to handle a few situations you may not have encountered before:
Q: If I’m having trouble meeting payroll, do I still have to pay non-exempt employees on the regular payday?
A: Yes. In general, an employer must pay covered non-exempt employees minimum wage and overtime due on the regularly scheduled payday. Failure to do so is a violation of FLSA.
Q: Is it legal to reduce the wages or number of hours of an hourly employee?
A: The FLSA does not address reduction of hours or wages for non-exempt employees. It does require that they receive at least the Federal minimum wage for all hours worked. It is not a violation of the Act to reduce wages or hours of non-exempt employees.
Q: Am I required to pay an hourly employee for a full day of work if they don’t work a full day, due to lack of work?
A: No. An employer is not required to pay non-exempt employees for hours they do not work.
Q: Can an exempt employee’s salary be reduced during a business slowdown?
A: In general, the reduction of an exempt employee’s salary will cause a loss of exemption; they must then be paid minimum wage and overtime for all hours worked. In some circumstances, reduction in salary may not cause a loss of the exemption. As long as the employer is not attempting to avoid salary basis requirements, the exempt employee’s salary may be reduced. However, deductions to salary may not be made by the employer based on the operating requirements of the business. This is a complicated question, and full details can be found here.
Q: Can an employer reduce an exempt employee’s leave?
A: Yes. Employers can substitute or reduce an exempt employee’s accrued leave for the time an employee is absent from work, even if the absence is directed by the employer because of a lack of work.
Q: Can a salaried, exempt employee volunteer to take unpaid leave due to a lack of work?
A: Yes, if the employer asks for volunteers to take time off due to insufficient work, and an employee volunteers to take a day or days off for personal reasons (other than disability) the employee’s salary may be reduced for one or more full days of missed work. The employee’s decision must be completely voluntary.
Labor laws can be tricky. This list is meant to be an overview, not a legal guide. For full regulations, please see the Wage and Hour Division website . Remember to check your state’s labor laws as well. Always seek professional legal advice whenever you are in doubt about employment law.