Restaurant chain docking several general managers salaries

[drr]

What is the name of your state? Texas

I work for a medium size restaurant chain in Dallas, Texas. They have currently docked several general managers salaries. The current structure has been a base salary, with no bonus. They have changed the salary structure where they are able to dock salaries if you do not meet certain criteria. We had to sign a paper with our area director as a witness. It was a pressure type situation. The president of the company said this is not a legal document. Now my question is; are they allowed to dock our salaries? Is this illegal?

 

[cbg]

No, it is not legal; that is, if you qualify for exempt status (which as a GM you probably do). An exempt employee's salary can be docked ONLY in the following situations:

1.) If it is either the first or last week of employment and you did not work the full week

2.) If you are on FMLA

3.) If you are suspended for a major safety violation (NO other reason)

4.) If the company has a bona fide sick time policy with a reasonable number of days; you have already used up all of these days and call in sick again

5.) If you take a day off for strictly personal reasons

In ALL of these cases except #2, you can only be docked in full day increments. If you work ANY part of a day then you must be paid for the full day, even if you only work 10 minutes before you go home sick, or whatever. The ONLY exception to this is if you are on FMLA, where you can be docked for the portion of the day which was FMLA time (assuming that you worked part of the day).

There are NO circumstances in which your pay can be docked for failure to meet certain criteria.

On the other hand, your salary can legally be REDUCED for that reason - that is, instead of receiving a weekly, monthly, or annual amount of xx,xxx you are now ON AN ONGOING BASIS receiving yy,yyy) as long as they provide you with whatever notice is required by your state. They CANNOT "reduce" your salary one week and then increase it back to the original amount if by doing so it amounts to an illegal docking; to be a legal reduction the new amount has to be on an ongoing basis.

You cannot take any legal action until they actually dock someone's pay; they haven't technically broken any laws yet. When and if they do, the individual's recourse would be to file a complaint with the state Department of Labor.

 

[JETX]

With all due respect to cbg, I disagree..... at least until completing a review of the EXACT agreement.

If the employee pay is based on meeting certain goals or criteria and the employee has signed an authorization for deductions if those goals are not met, the employer CAN deduct from the pay as authorized..... as long as the net pay does not drop below the federal minimum wage level.

The key here is that the afffected employee has agreed to this 'adjustment' by signing the agreement.

Texas Labor Code:
"§ 61.018. Deduction From Wages
An employer may not withhold or divert any part of an employee's wages unless the employer:
(1) is ordered to do so by a court of competent jurisdiction;
(2) is authorized to do so by state or federal law; or
(3) has written authorization from the employee to deduct part of the wages for a lawful purpose."

 

[Beth3]

My take on this is that the employer has implemented a variable pay plan for management employees, and that is legal. They were popular in the 80s but have somewhat gone by the wayside since then, but they're still around. They can be structured any number of ways but the most common is that the employee is entitled to a mininum monthly salary of "X". If certain performance indicators are met, then the salary level will be "Y". If those are exceeded, then the salary level will increase to "Z" and so forth. Conversely, the amount of the employee's pay that is variable can be reduced (but not below "X") based on not meeting the performance indicators.

drr, we're all short on the information necessary to understand exactly what is going on and cbg is absolutely correct on the legal requirements for docking pay, but a variable pay plan contingent upon meeting certain performance measures is not the same as docking pay.

 

[cbg]

Good point, Beth. I'd completely forgotten about variable pay plans. I did primarily benefits through the entire decade of the 80's and compensation is still one of my weaker points, so I never had any direct experience with them.

Jetx, I would venture to say that the deductions being referred to are for things like shortages and damages, rrather than the docking of pay, and I would still question whether or not that is legal under the FLSA when it comes to exempt employees.

 

[drr]

Beth and cbg,
I guess it would be more like activating an implemented variable pay plan for management employees. When hired we agreed on a certain amount. Now with this new pay plan if we do not hit the targeted criteria can they deduct a percentage from our salary? It would end up falling below the salary we originally agreed upon. They changed the formulas on our profit and loss, and gave us a sales budget that was unrealistic to hit. Basically none of us really had a chance to hit these unrealistic numbers. We wouldn't receive a bonus, but the company would definately get there percentage. Although we signed a paper, is it still legal? If we did not sign the paper, they would of fired us for some other reason. Should I take some sort of action, or should I just let it go? That's the kind of company it is. Yes, I'm looking for something new.

 

[Ramoth]

drr, it all depends on how the 'agreement' is worded. Saying that your base salary is $2000 a week, but for every 1% under goal you are, you get $100 less would be illegal. Saying that your base salary is now $1000 per week, plus $500 for hitting the goal, and $100 for each 1% over goal would be legal.

You can ask the state DOL to look at the 'agreement' and tell you if it's legal or not. If it's illegal, it doesn't matter if you signed or not - it's still illegal. If it's legal, it's legal, and the restaurant could enforce it without your signature (assuming you aren't under contract).

 

[drr]

Thanks to everyone who answered my post. I will take the paper signed to the DOL.