EMPLOYER MAY NOT DOCK NON-EXEMPT EMPLOYEE FLUCTUATING WORK WEEK SALARY FOR SICK LEAVE ABSENCE
By Sharon G. Hobbs
October 2006
The Department of Labor (DOL) issued an opinion letter recently clarifying that an employer may not dock a non-exempt employee on a fluctuating work week salary plan for a full day's absence for sick leave.
An employer may dock an exempt employee's pay for a full day's absence for sick leave if the employer provides a sick leave plan to its exempt employees, but the exempt employee has either used up all of his or her sick leave or has not yet qualified for sick leave.
A non-exempt employee on a fluctuating work week salary plan has agreed with his or her employer that a specified salary covers all hours worked that week regardless of how many or few hours are worked. The salary must be large enough to ensure that the regular rate will always be at least the minimum hourly wage in any work week. The regular rate is calculated by dividing the salary by the number of hours worked in any particular work week. The employee is then paid overtime at one-half times the regular rate for that week.
The DOL opinion letter said that the regulations which apply to salary for exempt employees do not apply to non-exempt employees on a fluctuating work week salary plan. The regulations addressing fluctuating work week salary plan clearly require the employee to be paid the full salary each week that the employee works any hours at all. Thus, no deductions may be made for sick leave or any other absences (e.g. vacation or other personal time off) caused by the employee.
Sharon Hobbs practices in the areas of business law, employment law and estate planning.
© 2006 Rinke-Noonan.
This article is a general discussion of legal issues and is not intended to be legal advice. We would be pleased to review the specific facts and law regarding any given legal matter.
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