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Nov24

Laid off salary-exempt employee

Compensation
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Is a laid off salary-exempt employee entitled to full wages for the week in which the employee is terminated or for the full pay period whether 2 weeks or one month?

No, the employee is not entitled to payment for the full pay period, or even for the full week.

The regulations regarding exempt employee salaries are under the federal FLSA, the Fair Labor Standards Act. The FLSA permits an employer to prorate the first and last weeks salary, based on the number of days that the employee works during those weeks.

Suppose Erik is an exempt employee who normally works 5 days per week. During his last week of employment, Erik works only 3 days. The employer must pay Erik 3/5 of his usual weekly salary for his final week of work.

However, the employer must prorate salary based on the number of days worked, not the number of hours worked. Even if Erik only worked an hour or two on each of those 3 days, he must receive his full salary for each day.

Read more about this at: http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.pdf

 

 

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This entry was posted on Tuesday, November 24th, 2009 at 10:22 am and is filed under
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