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Tammy’s Top 10 Q&A’s (The Wage & Hour Trifecta)

  1. What if an exempt employee is on intermittent FMLA and works part time at home? Do we have to pay her full paycheck?

    Unpaid FMLA is an exception from the salary basis “no pay docking” rule. Under 29 CFR 541.602(b) (7): “An employer is not required to pay the full salary for weeks in which an exempt employee takes unpaid leave under the Family and Medical Leave Act. Rather, when an exempt employee takes unpaid leave under the Family and Medical Leave Act, an employer may pay a proportionate part of the full salary for time actually worked. For example, if an employee who normally works 40 hours per week uses four hours of unpaid leave under the Family and Medical Leave Act, the employer could deduct 10 percent of the employee’s normal salary that week.”

  2. If an employee works overtime even though they are told it must first be approved, are we obligated to pay overtime?

    Yes, the employee must be paid for unapproved overtime.  However, you can adopt and implement a policy requiring approval of overtime and stating that employees who work unauthorized overtime may be disciplined up to and including discharge from employment.

  3. Is there a distinction between potential required hourly vs. salary pay? What does the weekly $679 go to?

    All employees paid on an hourly basis are non-exempt and must be paid overtime for all hours worked over 40 in a workweek.  Employees paid a salary may be exempt if they are paid at least the guaranteed minimum salary and meet one of the duties tests for exemption as an executive, administrative or professional employee.  Employees paid on a salary who do not perform exempt work — a secretary, for example — are non-exempt and overtime eligible.  For more on the duties tests for exemption visit: https://www.dol.gov/whd/regs/compliance/hrg.htm.

  4. Our exempt employees never work more than 40 hours a week. If they have used all of their PTO and continue taking time off, is it correct that we cannot dock them?

    Under 29 CFR 541.602(b)(2), an employer can take deductions from salary, in full-day increments, for absence due to sickness or disability only if “the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability. The employer is not required to pay any portion of the employee’s salary for full-day absences for which the employee receives compensation under the plan, policy or practice. Deductions for such full-day absences also may be made before the employee has qualified under the plan, policy or practice, and after the employee has exhausted the leave allowance thereunder.”  You cannot deduct for partial day absences, unless the absence is for unpaid FMLA leave.

  5. Is this rule definite?  How certain are you that the rule will be effective 01/01/2020?

    No prediction can be 100%, but I am confident that we will see an increase in the minimum salary required for deduction during first quarter 2020.

  6. What is the legal definition of an employee who is classified as salary/non-exempt and what is the legal way to pay that type of classification?

    The FLSA requires employers to pay employees at least the minimum wage and overtime at 1.5 times the employee’s regular rate of pay (all earnings / all hours) for hours worked over 40 in a work week — unless the employee qualifies for an exemption.  Our webinar discussed the upcoming changes to the “white collar” exemptions for executive, administrative and professional employees.  There are three requirements for these exemptions: (1) payment of a minimum salary; (2) which must be paid on a “salary basis” — paid every week in which the employee performs any work, regardless of the number of hours worked or the quality of work; and (3) performing exempt duties as set forth in the federal regulations at 29 CFR Part 541.  Employees that do not receive a guaranteed salary must be paid overtime.

  7. Is the salary stated of $35,309 nationwide?  I was told that California’s rate is $49,920.

    The USDOL has proposed $679/week ($35,309 annualized) as the minimum required salary for exemption under the federal FLSA.  Like minimum wage, states may adopt a higher minimum — as CA and NY have done.  You have to comply with the higher required salary.  Thus employees in NY and CA will not be impacted by this rule.

  8. If reclassifying from exempt to non-exempt, do we need to back pay for overtime?

    If you misclassified an employee as exempt, that employee would be owed back overtime wages for up to 3 years and an equal amount in liquidated damages.  If you reclassify because of the DOL’s proposed increase to the minimum salary level, than, no back wages would be due as the new rule will only apply going forward.

  9. Just to confirm, this is all applicable only to companies with over 50 employees?

    No, that is not correct.  The FLSA applies to all employees of any company with gross revenue of $500,000 or more — that is called “enterprise coverage.’  If a company does not have $500,000 in gross revenue, individual employees are still protected by the FLSA if they are acting in interstate commerce, which includes using the U.S. Mail, making telephone calls to another state, running credit cards and using products for their job that were manufactured in another state.  In short, almost every employee in the country is covered under the FLSA.  Please consult a wage & hour attorney before deciding that you need not comply with the FLSA.

  10. Is tracking exempt employee’s hours with timesheets considered compliant even if we don’t reclassify employees?

    Yes, there is no legal bar to tracking hours of exempt employees.  You do not have to track, but you may track.