Q: I AM a salaried employee exempt from overtime. I often work more than 40 hours per week. However, there are days when I work less than 8 hours per day. For example, last week, due to a personal emergency, I was able to work for 6 hours only. When I work less than 8 hours in a day, my employer deducts from my salary an amount equivalent to the number of hours that I was out. Is this right?
A: If you are a true exempt employee, and paid on a salary basis, then your employer should not dock your salary if you miss a partial day of work. Such docking policy is contrary to the salary basis rules. True exempt employees are paid for the value of their services, not their time.
As we have previously discussed in this column, for an employee to be truly exempt from overtime, they must be employed in an executive, administrative, or professional capacity. The law strictly applies the “executive,” “managerial,” and “professional” exemptions to the overtime provisions. True exempt status is determined primarily by an employee’s duties.
For example, executives or managers must perform managerial, not merely ministerial, duties. These duties include managing the business, hiring, firing, and disciplining employees, deciding on employee salaries and wages, and creating work policies and procedures. These duties must take up more than 50% of their work time. If, for example, managers work 8-hour days, they must spend more than 4 hours per day on managerial work.
True exempt employees must also be paid at least twice the state’s minimum wage for full-time employment. The salary basis requirement allows an employer to break an exempt employee’s salary down into an hourly rate for payroll purposes. The employer may also ask a salaried employee to use a time clock to record his time, as long as his compensation is not actually calculated based on the hours on the time card.
Generally, with some exceptions, exempt employees must receive their full salary for any week in which they perform any work, without regard to the number of days or hours worked. Because salaried employees are paid for the general value of their services rather than the precise amount of time spent on the job, employers may not dock their pay for partial days missed or for unsatisfactory performance.
Additionally, deductions may not be made for absences caused by the employer or the operating requirements of its business where the employee is ready, willing and able to work. Similarly, deductions generally may not be made for absences during part of a workweek resulting from jury duty, attendance as a witness, or temporary military leave. An employer may offset any amount received by an employee as jury fees, witness fees, or military pay against the salary and still keep the employee’s exempt status.
However, an employer may reduce a salaried employee’s salary if the employee missed one full day or more of work for personal reasons, sickness, or disability as defined by law.
An employer who makes improper deductions from a salary will lose the exemption status if the facts demonstrate that the employer engaged in an actual practice of making improper deductions, which shows that the employer did not intend to pay employees on a salary basis. If the exemption status is lost, the employee may become entitled to additional wages.
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The Law Offices of C. Joe Sayas, Jr. welcomes inquiries about this topic. All inquiries are confidential and at no-cost. You can contact the office at (818) 291-0088 or visit www.joesayaslaw.com.
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C. Joe Sayas, Jr., Esq. is an experienced trial attorney who has successfully obtained significant recoveries for thousands of employees and consumers. He is named Top Labor & Employment Attorney in California by the Daily Journal, consistently selected as Super Lawyer by the Los Angeles Magazine, and is a member of the Million Dollar-Advocates Forum.