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Concerning Salaried Employees

The owner of our company wants to put everyone in our office of 5 employees on a salary basis. He says that everyone will get paid for 40 hours whether we work 40 or 80, however, if we take a day off, we will have to use our vacation/sick pay of 10 days yearly in order to get paid for the time off. How is salaried personnel defined? I handle HR an am the only employee that could possibly be exempt. How does this salaried status affect vacation/sick time?
Thanks for your help!

Any employee can be paid by salary, but that does not necessarily make the employee exempt. Under the federal FLSA or Fair Labor Standards Act, an employee must meet certain requirements for job duties to be exempt. If your employees do not meet those requirements, then they are entitled to overtime when they work more than 40 hours in the payroll week.

It sounds like the owner wants to put all the employees on salary. An employer can legally do this. It makes calculating payroll much easier in situations where most employees work 40 hours per week. However, the employee is still entitled to overtime after 40 hours. The non-exempt employees salary can also be prorated in any week in which the emplopyee works fewer than 40 hours.

An exempt or non-exempt employee who takes time off can be required to use vacation, sick leave or PTO for that time. When an employer has a bona fide paid sick leave policy, and the exempt employee takes additional days off after exhausting sick leave, the exempt employee need not be paid if he or she misses a full day of work. If the exempt employee works any time at all on that day, even 5 minutes, even checking email or taking a work-related phone call, the exempt employee is entitled to his or her full days wages.  

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This entry was posted on Friday, July 23rd, 2010 at 8:43 am and is filed under
Compensation, Human Resources Management.
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