Human Resource Blog

Under federal law, as well as state laws in Indiana and Illinois, an exempt employee need not be paid for the entire week, when they are terminated mid-week. If the employee has only worked 3 days, he or she can be paid just 3/5 of the usual weeks salary.

Both Indiana and Illinois permit employers to make deductions from an employees paycheck for loans, which is how upside down PTO is usually handled. (The thought process being that when Sally took an extra day off and was paid for it, the employer was basically loaning Sally one days salary. The loan comes due if Sally is terminated, under most company policies.) As long as the employee signed an authorization willingly, the employer can deduct any overpayment. Most employers include such an authorization when newly hired employees sign the employee handbook. Usually an authorization is also included on the form that employees sign to request PTO. Such authorization must be freely given, and not coerced. If you have such an agreement, there should be no problem withholding one days salary for each day of PTO owed.

If you do not have such written authorization, you cannot deduct money from the employees paycheck for the negative PTO balance. The company just loses it.

Suppose Sally is terminated after working 3 days this week. Sally owes 3 days of PTO, and has signed an authorization for deduction. Her employer could legitimately pay Sally nothing, because the amount Sally owes is equal to the wages she is due.

Read more about the Illinois law here: http://www.state.il.us/agency/idol/faq/qawage.htm

Read more about the Indiana law here: http://www.in.gov/dol/2345.htm

In the U.S., unlike some other countries, the federal government does not dictate what holidays a private employer must give to workers (even in California.) Employers are not required to be closed on any holiday. And if they are closed, they can choose to pay or not pay workers, as the employer prefers. Yes, Thanksgiving is a federal holiday. But that only means that the post office and other federal government offices are closed — it does not mean that every private employer must be closed.

Many, many businesses are open on Thanksgiving, including grocery stores, drug stores, gas stations and some retailers. Staff at hotels and motels, and some restaurants (fast food) are needed 365 days per year. Thanksgiving is one of the busiest days at many movie theaters. Obviously, those who provide emergency services, including police, firefighters and hospital personnel work on holidays — and we are glad they do! When you watch the football game on TV, not only are the football players, coaches and referees working, so are the cameramen, producers, announcers and hot dog venders. And there are too many other people who work on Thanksgiving to list (including the person who is answering your question!)

So lets all take a minute to list the many things we have to be thankful for, including jobs and the people who provide necessary services on Thanksgiving!

This is really an accounting question, not an HR question. But we believe that the employee is correct.

In this example, the employee is not really \”buying\” anything. When an employee buys 5 extra vacation days, he or she is reducing their annual income by 1/52 (an amount equal to one weeks salary) and spreading that reduction over 26 pay periods. Suppose the bi-weekly deduction is $75. Since the employee is not really earning that $75, he or she should not have to pay taxes on the unearned (and unpaid) amount.

However, even if the employer continues to do this wrong, it will even out in the end. Basically, the employee is having an extra weeks worth of income tax withheld each year. When the employee files his or her income taxes, the refund will be more, because these taxes were withheld.

It is also important that the employer accurately report the employees earnings. Suppose John normally earns $1,000 per pay period. With the $75 reduction, Johns earnings for the pay period are $925, not $1,000. And John should be paying tax on the lower amount.

Hi Sandy! We can relate to your problem– it is very frustrating working for an employer where the rules seem to constantly change. As an exempt employee, you are entitled to payment for the full day, when you work any portion of that day. So if you work for an hour on Tuesday, and then go home, you must be paid your full salary for the day (and therefore your full salary for the week.) If you participated in a conference call from home, or took work home, or took work-related phone calls from the employer or coworkers, you would also be entitled to your full salary for the day and week.

The relevant law is the federal FLSA, or Fair Labor Standards Act. The FLSA permits an employer to not pay an exempt employee who misses an entire day of work due to illness, but only if the employer offers some sort of paid sick leave plan. Suppose ABC Corp. offers 5 paid sick days per year. Michelle, the controller, has used all her sick leave, and is out sick an additional day. The employer can legitimately not pay Michelle, as long as she did no work at all on that 6th sick day. However, if the employer offers no paid sick leave program, then Michelle must be paid for the entire week, as long as she performs any work at all during the week.

Different rules apply when the employer has no work available for the employee, when the employee takes time off for personal business, or when the employee does no work at all during the week.

The link to the U.S. Department of Labor Fact Sheet on this topic is: http://www.dol.gov/esa/whd/regs/compliance/fairpay/fs17g_salary.pdf
(you\’ll probably have to cut and paste it into your browser.)

The employers action in putting the employee on FMLA was 100% legal and even very compassionate. Employees who are on short term disability are normally also on FMLA at the same time.

FMLA provides up to 12 weeks of unpaid, job-protected leave for the employees serious health condition. If the employee was not on FMLA, the employer could fire her for missing more than 2 or three days of work, as excessive absenteeism. The employees boss was 100% right — this move saves her job. It also continued her health insurance benefits, which would have ended if she had been terminated.

The employee can still collect any short term disability that she is entitled to, while on FMLA. It is up to the employer whether the employee is permitted to use her 3 weeks of vacation while on FMLA. But, employers have the right to schedule vacations and would be under no obligation to permit an injured worker to take 3 consecutive weeks of vacation, whether or not she was on FMLA. By law, your friend must be permitted to use any sick time that she has accumulated, while on FMLA.

On this site, we answer questions from HR pros and employers. Our sister site, at www.laborlawtalk.com, answers questions from employees. For more information, you friend can post her questions there.