The snow's coming down pretty good and an exempt employee calls to say she can't make it in today because her car is stuck. Can you deduct a full day's pay from her salary for that missed day? Yes, according to a pair of new U.S. Labor Department opinion letters on the issue.
What if your workplace closes down because of the bad weather? In that case, it's a different story. You can't dock her pay, but you can require her to use accrued leave time for the missed day.
Two Labor Department opinion letters help clarify the confusing issue of how to treat the hours that exempt employees miss because of inclement weather. While opinion letters don't carry the weight of law, courts are deferential to them and they give you an idea of how the Labor Department would rule in similar circumstances.
The flowchart below shows the yes/no calls to make when deciding whether you must pay employees when inclement weather interrupts work.
If your workplace remains open ...
When your organization remains open during inclement weather and an exempt employee misses work for his own (non-illness) reason, you can take a full-day deduction from the person's salary, says the Labor Department letter, which was answering a health care facility's inquiry. Or, the employer can require the employee to use vacation time or accrued leave to cover the time off.
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One key point: You can deduct only full-day absences from exempt employees' salaries. Docking pay for partial-day absences could destroy the person's exemption. An exempt employee who shows up for part of the day should be paid for a full day, regardless of how long he or she is there.
If you close the workplace ...
Organizations always have the option of closing their doors during inclement weather. If you do that, your organization can require exempt employees to take vacation time or use leave, but you can't insist on leave without pay.
The DOL said the Fair Labor Standards Act (FLSA) doesn't require employers to provide vacation time. So, employers are free to administer leave programs in any nondiscriminatory way. Employers may charge time off as leave even in amounts less than a day as long as the employee's salary remains the same. The key is that the employee's salary can't be affected.
In cases where a weather closing leaves an employee with a negative leave balance, employers can, at their discretion, grant the leave and allow the employee to make it up later.
Final tip: The opinion letters remind employers to establish a written policy against making improper salary deductions. (See a sample policy at www.dol.gov/whd/regs/compliance/fairpay/modelPolicy_PF.htm.)
While occasional mistakes in pay calculation won't destroy an employee's exemption, a pattern of improper behavior can. Employers who frequently make improper salary deductions or have no workable system for resolving disputes won't fare well in court.
Note: Read these Labor Department opinion letters: FLSA2005-46 and FLSA2005-41.