Labor Department Advises Employers on Deductions for Weather-Related Absences
The Wage and Hour Division of the U.S. Department of Labor’s Employment Standards Administration (DOL) recently issued two opinion letters addressing deductions from exempt employees’ pay for weather- or disaster-related absences. The Wage and Hour Division has released a series of opinion letters in recent months addressing various issues under the Fair Labor Standards Act (FLSA). Such letters do not carry the weight of law but provide employers with guidance as to how DOL interprets the statute.
To qualify for exemption from FLSA requirements regarding minimum wage and overtime pay, employees must meet certain tests, including the “salary basis” test. That test requires that, subject to certain regulatory exceptions, the employee receive full salary for any week in which he or she performs any work without regard to the number of days or hours worked. The exceptions allow employers to make salary deductions “for one or more full days for personal reasons, other than sickness or disability.” Deductions may also be made for absences of “one or more full days occasioned by sickness or disability (including work-related accidents) 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 opinion letters clarify that DOL considers an absence due to adverse weather conditions (such as transportation difficulties during a snow emergency) when the employer remains open for operations to be an absence due to personal reasons. Therefore, an employer that remains open under such circumstances may make deductions from the pay of an exempt employee who chooses not to report for work, provided that deductions are taken only for full-day absences. Deductions may not be made for partial-day absences. If, for example, the employee misses a day and a half of work, the employer may deduct only one day’s pay. The employer may also require the employee to take vacation, leave bank deductions, or leave without pay in full-day increments.
If the employer closes operations due to weather conditions or other disaster, then absences are treated as “occasioned by the employer or by the operating requirements of the business” rather than as occasioned by personal reasons and exempt employees must receive their full pay if they performed any work during that workweek. (The employer need not pay employees for any workweek in which they perform no work, such as when the business is closed for a full week.) The employer may require an exempt employee to take vacation or other accrued leave, or may debit a leave bank account, provided that the employee still receives pay equal to the guaranteed salary. This applies to both full-day and partial-day absences. If (a) the employer does not have a bona fide benefits plan to provide compensation, (b) the employee has no accrued benefits in the leave bank, (c) the employee has limited accrued leave benefits and reducing that leave will result in a negative balance, or (d) the employee already has a negative balance in the accrued leave bank, then the employer must pay the employee’s full salary.
For links to the full text of these (FLSA2005-41 and FLSA2005-46) and other FLSA opinion letters, click here. For additional guidance on the FLSA, click here.
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