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SUBJECT:
Fair Labor Standards Act (FLSA) Procedures
Regarding Exempt Employees |
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EFFECTIVE DATE:
August 26, 2005 |
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DISTRIBUTION:
State HR Directors |
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FROM: Jack
E. Rickerson, Director DATE:
August 26, 2005 |
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PURPOSE:
This Bulletin is being issued to update and replace Bulletin 04-03 due to
a clarification from the Federal Department of Labor (DOL) concerning
deductions of exempt employees who are taking unpaid leave for situations
covered by the Family Medical Leave Act (FMLA). Bulletin 04-03 is hereby
revoked.
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| BACKGROUND:
Bulletin 04-03 was issued in response to amendments to the
Federal regulations implementing the FLSA that took effect on August 23,
2004. In order to guarantee the protections of the “safe harbor” clause
established in those amendments, Bulletin 04-03 had to be issued no later
than August 23, 2004 which meant that the Bulletin was issued before we
received final clarification on all issues from DOL.
We have since heard back from DOL. Based on their recommendation, exempt
employees using leave without pay for FMLA purposes are to use leave
without pay only in full-day increments.
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PROCEDURES: |
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Limitations on the Reduction of the
Salary of an Exempt Employee:
FLSA requires that exempt employees must be compensated on a “salary
basis” as promulgated by the U.S. Department of Labor. The salary of an
exempt employee cannot be reduced because of variations in the quality or
quantity of work performed.
Except for those instances described below, exempt employees must be paid
their full salary for any week in which they perform any work. No salary
is to be paid in any work week when no work is performed.
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| 7.2 |
Reductions in the Salary of an Exempt
Employee are Limited to the Following Situations:
a) Absences from work for one or more full days for personal reasons,
other than sickness or disability (i.e. when employees have no paid leave
to cover the time off, and the reason for the absence is for personal
reasons, not sickness or disability, the reduction must be in full-day
increments);
b) Absences from work for one or more full days due to sickness or
disability if deductions are made under the sick leave plan which provides
wage replacement (i.e. if an employee does not have enough sick leave to
cover a full day’s absence, the employer cannot deduct for a half-day of
leave without pay);
c) To off set any amounts received as payments for jury fees, witness
fees, or military pay;
d) Penalties imposed in good faith for violating safety rules of “major
significance”;
e) Unpaid disciplinary suspension of one or more full days imposed in good
faith for violations of workplace conduct rules; (NEW)
f) Proportionate part of an employee’s full salary may be paid for time
actually worked in the first and last weeks of employment; or
g) Deductions in the salary of exempt employees due to a budgetary
required furlough.
None of these exceptions affect the requirement that employees use sick
leave, shared leave, vacation leave and holiday compensatory time in half
or full-day increments and leave without pay in full day increments.
If an agency believes that it has a special circumstance for any other
exception, the agency must clear the exception with DPS before acting on
it.
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| 7.3 |
Managing Complaints:
Each agency must provide all current exempt employees and any new employee
hired into an exempt position with the information set forth in
subsections 7.1 and 7.2 above and information about their right to file a
complaint regarding deductions they believe are improper. Agencies should
notify the Division of Personnel
Services (DPS) of any complaints that are resolved at the agency level.
Complaints that cannot be resolved at the agency level should be forwarded
to DPS. A handout with this information was made available to all agencies
for distribution to affected employees on August 23, 2004. This handout,
or an equivalent document, should also be posted on each agency’s official
bulletin board.
Complaints regarding this issue are being administered by DPS for a number
of reasons. The first is that historically, DOL has treated the State of
Kansas as one employer for the purposes of FLSA and because of that, DPS
has been the point of contact with DOL. Given the potential for DOL
assistance in determinations regarding salary reductions of exempt
employees it would be best if we maintained the single point of contact.
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| 7.4 |
Reimbursement for Improper Reductions:
Agencies must reimburse employees for deductions that are found to be
improper.
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| 7.5 |
Good Faith Effort to Prevent Improper
Deductions:
After any determination that improper deductions were made, the agency
must take, and document, good faith action to ensure that such deductions
do not occur again.
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REFERENCES:
K.A.R. 1-5-24, K.A.R. 1-9-1, 29 C.F.R. Part 541
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CONTACT PERSON: Ken
Otte at ken.otte@da.ks.gov or at (785) 296-4383. |
