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Aug19

Intermittent FMLA for Exempt Employee

An exempt employee is certified for 2-3 days per month and these days are usually consecutive do to “flare-ups”. If he normally works 45-50 hours per week, how do we determine time to deduct for absence? If he works 38 hours Monday-Thursday but is absent on Friday, do we still deduct a full days’ pay or only 2 hours based on a “40-hour” week? If he works 9 hours a day for 18 days and is absent the last 2 days of the moth, do we deduct for those 2 days?

Deductions from exempt employees’ salary is limited to certain circumstances, including for intermittent or reduced schedule leave under the federal Family & Medical Leave Act (FMLA). There are two options for determining compensation for exempt employees on intermittent or reduced schedule leave.

1. Convert the employee to hourly status for the duration of FMLA leave.
2. Keep the exempt employee as salaried and make appropriate deductions from his salary.

Converting the employee to hourly while on intermittent or reduced schedule leave ensures the employee won’t be paid for the time on leave; however, the employee will be paid for additional time worked. The employee’s exempt status will not be in jeopardy as long as the reason for the conversion is clearly documented as FMLA leave.

The often more preferable option is to keep the employee as salaried and make the appropriate deductions from the salary based on the employee’s regular workweek and hourly rate.

Determining an hourly rate for an exempt employee can be difficult. If your payroll system issues an hourly rate then this is step is easy. However, usually it comes down to determining a normal workweek by calculating the average of hours worked in the 12 workweeks preceding the start of the leave. Then, divide the employee’s weekly salary by the average hours worked in a workweek to determine the hourly rate. Some employers don’t record the hours worked by exempt employees at all. In this case, the average hours worked must be based on conversations with the employee and his immediate supervisor.

Remember to document the rationale behind the determination of the hourly rate. Use the hourly rate to reduce the employee’s salary as appropriate for his FMLA leave usage. Again, remember to document the salary adjustments as being due to FMLA leave.

It’s best to count the number of hours an employee actually uses for leave against their leave entitlement and for determining the appropriate salary deduction. So, an employee who works 38 hours Monday thru Thursday and takes Friday off as leave should still have 8 hours deducted from his leave entitlement and his salary be appropriately reduced. This allows the employer to clearly document which hours have been used for leave.

Just to be clear, an employer wouldn’t be in violation of the FMLA or FLSA by allowing employees to “make-up” leave time in a workweek. However, such a practice must be consistently and uniformly allowed of all employees to avoid costly discrimination claims. Also, allowing employees to “make-up” leave time essentially provides more time off than the 12-week leave entitlement under the FMLA. The added time may not seem like a lot at first but it easily and quickly adds up. This is another reason employers avoid this practice.

HTH!

This entry was posted on Friday, August 19th, 2016 at 9:01 pm and is filed under
Compensation, Labor Laws.
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