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post-title How does pay-docking work under the Fair Labor Standards Act?

How does pay-docking work under the Fair Labor Standards Act?

How does pay-docking work under the Fair Labor Standards Act?

KellieBoysenAre you confused about the pay-docking rules laid out by the Fair Labor Standards Act (FLSA)? You’re not alone.

The regulations are about as clear as mud. As а general guideline, the FLSA prohibits deductions from exempt employees. Also, the regulations state that salaried staff can’t have their pay modified (i.e. deducted) based on the number of days or hours they’ve worked.

Deductions also cannot be dependent on the quantity or quality of work the employee produces. However, there are several important exceptions to this rule. If your company accidentally makes an improper deduction, nothing bad will happen. If it’s an isolated incident, just correct the mistake, and move on.

If it’s an ongoing thing, though, and you’re caught, entire departments of exempt workers can become OT-eligible via the rules outlined in the FLSA. That’s going to suddenly and immediately drive up labor costs.

Many employers are confused about the FSLA labor and overtime regulations. However, the list of permitted and prohibited deductions can be summarized as follows:

Permitted deductions

  • Exempt employees are absent for а day or more for personal reasons other than sickness or accident.
  • Exempt employees don’t need to be paid for weeks when they do not work.
  • Exempt employees who are absent because of а sickness or disability, but where you (as the employer) provide and maintain а plan that compensated for loss of salary caused by sickness and disability and the employee has exhausted their “bank” of funds used for leave.
  • If employees violate safety rules of major significance.
  • You may deduct pay to offset amounts received from jury duty or witness fees or military pay, but you may only deduct amounts to offset the fees paid for jury duty, witness or military pay and no more.

One or more full days for violating workplace conduct rules

  • Partial weeks worked during initial or final weeks of employment.
  • When а salaried employee worked а reduced work schedule under the Family and Medical Leave Act (FMLA).

Prohibited

  • Business trips cannot be deducted from salary.
  • Lack of work without layoff or temporary leave — you cannot deduct pay for times when the employee is at work but there is little or no work to assign.

Who qualifies as а nonexempt employee?

This is complicated. Give us a call at Alternative HR if you are not sure if your employees are classified correctly.

About Kellie Boysen – Owner, Alternative HR:

Kellie Boysen is a certified Professional in Human Resources (PHR) with more than a decade of HR experience. She owns Alternative HR, a local human resource consulting and outsourcing organization that is dedicated to providing small business owners with an affordable alternative to hiring a full-time HR professional.

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