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The Fair Labor Standards Act (FLSA) requires that most hourly workers be paid 1.5 times their regular pay rate when they work more than 40 hours in a work week. But as we’ve discussed in previous blog posts, if you offer contract staffing services for workers in certain Professional, Executive, Administrative, Information Technology, and Outside Sales professions, they may be exempt from overtime if they meet the Department of Labor’s specific duties tests and are paid a guaranteed weekly salary of $455.

However, it is important to note that, in most cases, these contractors’ salaries cannot be docked. They generally must be paid their full salary for any week in which they perform ANY work.

Here are some examples of common improper salary deductions:

  • Deductions for partial-day absences
  • Deductions because the company is closed due to a holiday
  • Deductions because the company is closed due to weather
  • Deduction for poor quality or low production

There are some situations where pay docking is permissible:

  • FULL weeks where NO work is performed
  • FULL DAY absences for personal reasons, other than sickness or disability
  • FULL DAY absences due to sickness or disability if wage replacement benefits are available (i.e., Paid Leave)
  • To offset payment for jury or military duty
  • Penalties for violating safety rules of “major significance”
  • Unpaid disciplinary suspension of one or more FULL days for violations of conduct rules
  • Pro-rating partial weeks worked in the first and last week of employment
  • Intermittent unpaid leave taken pursuant to the Family and Medical Leave Act

This article is for informational purposes only and should not be considered legal advice.

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