Thursday, October 1, 2015

Should you deduct from an exempt employee’s salary for intermittent FMLA? [survey]

Suppose you have a salaried, exempt employee. You pay that employee a fixed weekly salary, regardless of the number of hours he or she works. Some weeks the employee works 40 hours, some weeks the employee works 30 hours, and some weeks the employee works 60 hours. In the calculus of a weekly paycheck, the number of hours worked is irrelevant. A salary covers all hours worked in a week, whether it’s one hour or 100 hours.

Let’s further suppose this salaried, exempt employee submits a request, and is approved for, intermittent leave under the FMLA. It could be for the employee’s own serious health condition, or that of a family member. As a result, this salaried exempt employee starts taking an hour or two off per week for doctor’s appointments related to the serious health condition. Is that FMLA time-off paid or unpaid, for the salaried, exempt employee?

FMLA is unpaid leave, and the law’s regulations make a specific allowance for an employer to require that a salaried, exempt employee take any intermittent FMLA leave as unpaid leave.
Leave taken under FMLA may be unpaid. If an employee is otherwise exempt from minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA) as a salaried executive, administrative, professional, or computer employee…, providing unpaid FMLA-qualifying leave to such an employee will not cause the employee to lose the FLSA exemption…. This means that under regulations currently in effect, where an employee meets the specified duties test, is paid on a salary basis, and is paid a salary of at least the amount specified in the regulations, the employer may make deductions from the employee's salary for any hours taken as intermittent or reduced FMLA leave within a workweek, without affecting the exempt status of the employee.
So, what is an employer to do? (1) what the law allows, and dock the salaried, exempt employee for any time spent taking intermittent FMLA leave? Or, (2) more than the law allows and pay the employee his or her full weekly salary?

I strongly favor option number 2.

Exempt employees do not work set schedules. They are not 9 – 5 jobs. Exempt employees work to get the job done (and, if they are not, you have problems bigger than whether to deduct an hour or two of pay for a doctor’s appointment). Because exempt employees work to get the job done, it is extraordinarily short-sighted (and, frankly, chintzy) to dock their pay for intermittent FMLA leave.

What message does that send? We expect that some weeks, you will work your butt off, well in excess of 40 hours, because your job requires that you put in the extra time. That extra time will include some nights, and even some weekends. Because you’re exempt, we don’t pay you overtime for those extra hours; it’s all covered by your “salary”. Yet, when you need a few hours away from work for physical therapy for your knee injury, or to take you ill parent to a doctor’s appointment, we are going to hold back from your salary the pro rata share of those hours. How are your employees going to feel about working all of those extra hours when you nickel-and-dime them like this?

Employers, do me a favor and treat your salaried employees like salaried employees. Pay them their salary, period, regardless of how many hours they work in a week. If they are otherwise not meeting your performance expectations, treat it like a performance problem, not a payroll problem.

Now, I want to hear from you. Does your company dock the salary of exempt employees who take intermittent FMLA leave, and should it be? Answer below, or at this link. I’ll publish the results in the coming weeks.