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March 10, 2006
Dear Name*:
This is in response to your letter concerning the application of Section 13(a)(1) of the Fair Labor
Standards Act (FLSA), 29 U.S.C. § 213(a)(1) (copy enclosed), to certain
employees of your client. You request that we assume that your client has
correctly classified these employees as exempt under Section 13(a)(1) of the
FLSA as bona fide executive, administrative or professional employees. For
purposes of this response, we will also assume that your client is an enterprise
subject to the provisions of the FLSA.
You ask whether implementation of two new job requirements that your client is considering
would result in loss of the exemption. First, your client wishes to require
exempt employees to work either 45 or 50 hours a week, depending on whether
they are officers of the company. Second, your client wishes to require, at
its option, that exempt employees make up work time lost due to personal
absences of less than a day. Your client would not dock the salary of any such
employees for a failure to meet either requirement but consistent failure to
observe the proposed requirements would result in “discipline up to and
including discharge.” You state that all of the employees in this group
receive a salary of at least $544 per week.
Section 13(a)(1) of the FLSA provides a complete minimum wage and overtime pay exemption for any employee
employed in a bona fide executive, administrative, or professional capacity, as
those terms are defined in 29 C.F.R. Part 541 of the revised overtime security
regulations, which took effect August 23, 2004 (copy enclosed). An employee
may qualify for exemption if all of the pertinent tests relating to duty,
salary level, and salary basis are met. “An employee will be considered to be
paid on a ‘salary basis’ within the meaning of these regulations if the
employee regularly receives each pay period on a weekly, or less frequent
basis, a predetermined amount constituting all or part of the employee’s
compensation, which amount is not subject to reduction because of variations in
the quality or quantity of the work performed. Subject to the exceptions
provided in [29 C.F.R. § 541.602(b) (copy enclosed)], an exempt employee must
receive the full salary for any week in which the employee performs any work
without regard to the number of days or hours worked. Exempt employees need
not be paid for any workweek in which they perform no work. An employee is not
paid on a salary basis if deductions from the employee’s predetermined compensation
are made for absences occasioned by the employer or by the operating
requirements of the business. If the employee is ready, willing and able to
work, deductions may not be made for time when work is not available.” 29
C.F.R. § 541.602(a) (copy enclosed).
You make clear that the employer would not dock an employee’s salary regardless of whether the employee
violated the two new rules. Thus, based on the information you have provided,
the client is free to implement the two rules without loss of the exemption.
The number of hours worked by an employee who is exempt under Section 13(a)(1)
of the FLSA is a matter to be determined between the employer and the
employee. An employer may require an exempt employee to make up work time lost
due to personal absences of less than a day without loss of the exemption under
Section 13(a)(1). See Cowart v. Ingalls Shipbuilding. Inc., 213 F.3d
261 (5th Cir. 2000). As the preamble to the final rule explains, an employer
may require an exempt employee to do things such as to record and track hours
and to work a specified schedule without affecting the employee’s exempt
status. See Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer Employees, 69 Fed. Reg.
22,122, 22,178 (Apr. 23, 2004) (copy enclosed). Please note, however, that the
failure to make up the time as required or to work the required number of hours
does not constitute a violation of a “workplace conduct rule” for which an
employer may impose a disciplinary suspension for one or more full days
pursuant to the new rule at 29 C.F.R. § 541.602(b)(5) (copy enclosed). Such
rules must be applicable to all employees and must relate to workplace
“conduct, not performance or attendance issues.” See 69 Fed. Reg. at 22,177.
This opinion is based exclusively on the facts and circumstances described in your request and is
given based on your representation, express or implied, that you have provided
a full and fair description of all the facts and circumstances that would be
pertinent to our consideration of the question presented. Existence of any
other factual or historical background not contained in your letter might
require a conclusion different from the one expressed herein. You have
represented that this opinion is not sought by a party to pending private
litigation concerning the issue addressed herein. You have also represented
that this opinion is not sought in connection with an investigation or
litigation between a client or firm and the Wage and Hour Division or the
Department of Labor. This opinion is issued as an official ruling of the Wage
and Hour Division for purposes of the Portal-to-Portal Act, 29 U.S.C. § 259.
See 29 C.F.R. §§ 790.17(d), 790.19; Hultgren v. County of Lancaster, 913 F.2d 498, 507 (8th Cir. 1990).
We trust that this letter is responsive to your inquiry.
Sincerely,
Alfred B. Robinson, Jr.
Deputy Administrator
Enclosures:
Section 13(a)(1) of the FLSA
29 C.F.R. Part 541
Defining and Delimiting the Exemptions for Executive,
Administrative, Professional, Outside Sales and Computer Employees; Preamble to
the Final Rule. 69 Fed. Reg. 22,122
(Apr. 23, 2004)
Note: * The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. § 552(b)(7)
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