Disciplinary Suspensions of FLSA Exempt Employees

No.: OSER-50 Revised
Date: April 13, 2005
SUBJECT: Disciplinary Suspensions of FLSA Exempt Employees

TO: All Holders of Employee Relations Manual

FROM: Kenneth A. Walo, Director

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This memorandum applies only to employees who are not eligible for overtime pursuant to the collective bargaining agreement and are exempt under the Fair Labor Standards Act and Maine Law.

The Secretary of Labor has issued new rules governing disciplinary deductions of time for employees who are exempt 1 from the overtime pay requirements of the Fair Labor Standards Act of 1938 (FLSA). These rules became effective August 23, 2004 , and offer some guidance to public employers as to what is required to maintain the exempt status of salaried employees. The Maine DOL has recently adopted identical rules regarding such deductions.

The previous regulations promulgated by the Secretary of Labor stated that an exempt employee "must receive his full salary for any week in which he performs any work without regard to the number of days or hours worked." In other words an exempt employee could not be subjected to disciplinary suspensions without pay for less than blocks of one or more full work week.

The new rules do allow an employer to impose a disciplinary suspension on an exempt employee for blocks of less than one or more full work weeks under certain circumstances.

1. The new rules still permit an employer to suspend an exempt employee without pay for less than one week as a penalty "in good faith for infractions of safety rules of major significance." "Safety rules of major significance" are rules "relating to the prevention of serious danger in the workplace or to other employees."

2. The new rules permit an employer to suspend an exempt employee for " one or more full days 2 for infractions of workplace 3 conduct 4 rules 5. Such suspensions must be imposed pursuant to a written policy applicable to all employees 6."

READ THE FOOTNOTES!

The above paragraphs do not relieve the employer of the need to follow applicable disciplinary policies and agreements when considering a suspension or other discipline. If you are in doubt about the appropriateness of a disciplinary penalty, please contact this Bureau.

State of Maine Policy

It is the State of Maine 's policy to comply with the salary basis requirements of the FLSA. Therefore, the State prohibits all managers from making any improper deductions from the salaries of exempt employees. The State of Maine has made employees aware of this policy, and that the State does not allow deductions that violate the FLSA.

What To Do If An Improper Deduction Occurs

If an employee believes that an improper deduction has been made to his/her salary, he/she has been directed by Human Resource Memorandum 5-05 to immediately report this information to his or her direct supervisor, to his/her human resources representative or to the director of the Bureau of Human Resources. Information received by a supervisor or human resource representative must be immediately reported to the Bureau of Human Resources or its Director.

1 If you have any question whether an employee is FLSA exempt, contact the Bureau of Human Resources.

2 Thus an employee may be suspended for less than a week in increments of full work days.

3 In the Preamble to the Regulations the DOL states that the fact that the misconduct occurred off the employer's property should not preclude an employer from imposing a disciplinary suspension of less than one week for off-site misconduct. The DOL appears to have rejected construing the rule to permit disciplinary suspensions of less than one week for off-duty misconduct.

4 The DOL construes workplace conduct to mean conduct, not performance or attendance issues. Additionally it must be serious misconduct.

5 As stated above the rules must be included in a written policy . That policy need not include an exhaustive list of specific violations that could result in a suspension.

6 The written policy must apply to all employees . That would appear to mean that the policy must be state-wide e.g. the Sexual Harassment Policy, the Domestic Violence Policy, the Drug Free Workplace Act, Bulletin 13.4.

Reports of improper deductions will be promptly investigated. If it is determined that an improper deduction has occurred, the employee must be promptly reimbursed for any improper deduction made.

THIS BULLETIN SUPERCEDES ALL PREVIOUS BULLETINS ON THIS SUBJECT

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OFFICE INFORMATION

Disciplinary Suspensions of FLSA Exempt Employees

State of Maine Policy

What To Do If An Improper Deduction Occurs