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Storm Warnings: When Can Workers Be Docked?

The Fair Labor Standards Act (FLSA) says that employees who are exempt under the overtime laws may be entitled to their regular salary if they are able to work. If you dock your employees' pay without justification, you could be liable for back pay and overtime—for all the exempt employees on staff.

New case: A group of exempt employees sued their employer for overtime pay. The workers argued that they should have been exempt from a “snow day policy” that effectively resulted in reduced pay. To prove their point, the group pointed to an e-mail message from the employer requiring workers to either use a vacation day in the bad weather or take a day off without pay.

However, the Seventh Circuit Court sided with the employer. Reason: Because the workers could use vacation time for snow days, they were not forfeiting their exempt status under the FLSA. Instead, the snow day policy could result in a deduction for time off. On the other hand, docking employees in these circumstances would have violated their exempt status.

Advisory: Do not go through another winter without a plan in place. If you have not done so already, develop a company-wide policy that is reasonable and fair. Include the “snow day” policy in your company manual.

 

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