Human Resource Blog

Paying Exempt Employee

What are the statutes in Arizona for paying terminated associates? For example, what does the law say about paying a salaried exempt associate who is terminated mid-week and works a 4/10 hour work week.
Example: The employees regular schedule is M,T,W,Th 10 hours each day and He terminates on Wednesday. Do we owe him 30 hours or 24 hours?

This matter is not addressed by Arizona statute, but it is addressed under the federal Fair Labor Standards Act. The FLSA permits employers to prorate payment for an exempt employee during the first and last weeks of employment, based on the number of days worked (not hours worked.)

In this example, the employee normally works 4 days per week. In his final week, he worked only 3 days. The employee would be entitled to payment of 3/4 the employees usual weekly salary, or 75% of the weekly salary. (If you base the employees weekly salary on a projected 40 hours, then paying the employee for 30 hours will be the correct amount.)

The FLSA requires payment for the entire day even when an employee works only an hour, or a few minutes. So if the employee came to work on Wednesday and only stayed an hour, he would still be entitled to 3 days pay. That is one reason why we do not encourage employers to think in terms of hours, for salaried exempt employees.