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FLSA Overtime Security Advisor

Compensation Requirements

Disciplinary Deductions

In addition to meeting certain duties tests, to qualify for exemption under the Regulations, Part 541, generally an employee must be paid at a rate of not less than $684 per week on a salary basis. As a general rule, if the exempt employee performs any work during the workweek, he or she must be paid the full salary amount. An employer may not make deductions from an exempt employee's pay for absences caused by the employer or by the operating requirements of the business. If the exempt employee is ready, willing and able to work, deductions from the exempt employee's pay may not be made when no work is available. One exception to this general rule is deductions and suspensions for certain disciplinary reasons.

To qualify for exemption, employees generally must meet certain tests regarding their job duties and meet certain compensation requirements. Job titles do not determine exempt status. You should also review the other sections of this Advisor for help in determining whether the employee meets the duties tests for exemption.

Are there any types of pay deductions that an employer may impose to discipline an employee?

Under what circumstances can an exempt employee be suspended without pay?

How long can an exempt employee be suspended without pay for disciplinary reasons?

What kind of notification does the exempt employee have to receive regarding a disciplinary suspension?


Are there any types of pay deductions that an employer may impose to discipline an employee?

An employer may only dock an exempt employee's pay for penalties imposed in good faith for infractions of safety rules of major significance. Safety rules of major significance include those related to the prevention of serious danger in the workplace or to other employees, such as rules prohibiting smoking in explosive plants, oil refineries or coal mines. A deduction from pay as a penalty for violating a safety rule of major significance can be made in any amount.

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Under what circumstances can an exempt employee be suspended without pay?

An employer may impose in good faith an unpaid suspension for infractions of workplace conduct rules, such as rules prohibiting sexual harassment, workplace violence or drug or alcohol use or for violations of state or Federal laws. This provision refers to serious misconduct, not performance or attendance issues. The suspension must be imposed pursuant to a written policy applicable to all employees.

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How long can an exempt employee be suspended without pay for disciplinary reasons?

Deductions from the pay of an exempt employee may be made for suspensions of one or more full days imposed in good faith for disciplinary reasons for infractions of workplace conduct rules. Such disciplinary deductions may only be made in full day increments.

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What kind of notification does the exempt employee have to receive regarding a disciplinary suspension?

The employer must have a written policy applicable to all employees in place prior to imposing a disciplinary suspension.

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Compensation Requirements

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