Mandatory Shut Down

[///M3Pete]

What is the name of your state (only U.S. law)? MA

I work for a small company in MA that is owned by a much larger company in CA. I was told that for economic reasons, my company would have mandatory shut downs for one week in June/July and one week in September/October. During these closures I will not be getting compensated unless I choose to use vacation time.

My question is this: I am considered a salaried employee. I do not qualify for overtime nor do I get paid for time worked beyond 40 hours. Is this a violation of my rights? According to to department of labor ( article - 29CFR541.602) it seems like it is.

[cbg]

Even an exempt employee is not entitled to pay for a week in which he does no work whatsoever.

And yes, it is quite legal for the employer to require that you use your vacation time if you want to be paid.

[pattytx]

Since you referenced 541.602, I assume that by "salaried" (which is merely a pay method) you mean exempt.

The exception is in the first paragraph, in that if an exempt employee performs NO work in the workweek, the salary need not be paid. So, if the shutdown weeks coincide with the company-defined workweek, what you mention will be legal.

[CraigFL]

You may be eligible for unemployment insurance.

[///M3Pete]

Since you referenced 541.602, I assume that by "salaried" (which is merely a pay method) you mean exempt.

The exception is in the first paragraph, in that if an exempt employee performs NO work in the workweek, the salary need not be paid. So, if the shutdown weeks coincide with the company-defined workweek, what you mention will be legal.

If I am ready, willing and able to work the time of the shut down and deductions are made from my salary (no pay for the week) am I still considered a salaried employee? I understand that If i have vacation time availably, the company can make me use it but what if I don't have vacation time?

Am I not reading the article correctly?

[Beth3]

If I am ready, willing and able to work the time of the shut down and deductions are made from my salary (no pay for the week) am I still considered a salaried employee? I don't understand your question. If you aren't paid for the shut-down week, how are deductions made from your salary? And what does that have to do with being a salaried (exempt) employe?

[pattytx]

I think the OP means salary reductions, as in not getting paid.

OP, read the regulation again. Note the statement I pointed out. NOBODY, even exempt (stop using the word "salaried") employees must be paid when they perform no work in the workweek.

[///M3Pete]

If I am ready, willing and able to work the time of the shut down and deductions are made from my salary (no pay for the week) am I still considered a salaried employee? I don't understand your question. If you aren't paid for the shut-down week, how are deductions made from your salary? And what does that have to do with being a salaried (exempt) employee?

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. from article 29CFR541.602

Isn't the fact that I will not be getting paid for the week considered a deduction from my salary? The quote above seems to suggest that I am NOT being paid an a salary basis if deductions are taken at a time where I am ready to work. Am I considered to be an hourly employee during the time of the shut down?

This all very confusing to me. Please be patient.

[///M3Pete]

I think the OP means salary reductions, as in not getting paid.

OP, read the regulation again. Note the statement I pointed out. NOBODY, even exempt (stop using the word "salaried") employees must be paid when they perform no work in the workweek.

I guess I should have started with salaried vs. exempt. Is there a difference between the two given the context of this conversation? Can you be one without being the other?

Thanks for the help.

[pattytx]

Yes, you can. Nonexempt employees can also be paid on a salaried basis. Exempt employees (with limited exceptions) MUST be paid on a salaried basis.

If you are exempt, my previous comments apply.

If you are nonexempt, you don't have to be paid for that week at all, your "salaried" pay method not withstanding.

[cbg]

Okay, let's try this. Pretend you have a salary of $1000 a week and are exempt. As indicated, the two are NOT synonymous.

$1000 a week divided by five days in the work week = $200 a day.

Company is closed for Independence Day. You work four days. Company pays you $800. That is a deduction. That is not allowed.

Company is closed for a whole week. You perform no work in the week at all. Company pays you $0.

Since NO salary is being paid, that is NOT a deduction. The law looks at a WEEKLY basis, not a yearly. NOTHING has been deducted - there IS no $1000.

Since no deductions have been made, this is legal.

[ArmyRetCW3]

Wage and Hour Opinion Letter FLSA2005-41 (Oct. 24, 2005); see also 29 C.F.R. §§ 541.600, 541.602(a); 69 Fed. Reg. 22,122, 22,178 (Apr. 23, 2004) (“[E]mployers, without affecting their employees’ exempt status, may take deductions from accrued leave accounts.”). Therefore, it is our opinion that the employer may require exempt employees to use accrued vacation time for any absence, including one resulting from a plant shutdown, without affecting their exempt status, provided that employees receive a payment in an amount equal to their guaranteed salary. “[A]n exempt employee who has no accrued [vacation] benefits . . . or has a negative balance . . . still must receive the employee’s guaranteed salary for any absence(s) occasioned by the employer or the operating requirements of the business.” Wage and Hour Opinion Letter FLSA2005-41.

[url]http://www.dol.gov/esa/whd/opinion/FLSA/2009/2009_01_14_02_FLSA.pdf[/url]


It is our opinion that salary deductions due to a reduction of hours worked for short-term business needs do not comply with § 541.602(a) because they result from “the operating requirements of the business.” 29 C.F.R. § 541.602(a). Thus, “[i]f the employee is ready, willing and able to work, deductions may not be made for time when work is not available.” Id. Deductions from the fixed salary based on short-term business needs are different from a reduction in salary corresponding to a reduction in hours in the normal scheduled work week, which is permissible if it is a bona fide reduction not designed to circumvent the salary basis requirement, and does not bring the salary below the applicable minimum salary. See Field Operations Handbook § 22b00; Wage and Hour Opinion Letter FLSA2004-5 (June 25, 2004) (“[R]ecurrent changes in the normal scheduled workweek . . . more likely would appear to be designed to circumvent the salary basis requirement.”).2 Unlike a salary reduction that reflects a reduction in the normal scheduled work week and is not designed to circumvent the salary basis requirement, deductions from salary due to day-to-day or week-to-week determinations of the operating requirements of the business are precisely the circumstances the salary basis requirement is intended to preclude. Therefore, in this instance, salary deductions due to MTO lasting less than a workweek violate the salary basis requirement and may cause the loss of exempt status.3 The employer is not, however, required to pay the salary for MTO of a full workweek. See 29 C.F.R. § 541.602(a) (“Exempt employees need not be paid for any workweek in which they perform no work.”).
Section 541.602

Wage and Hour Opinion Letter FLSA2009-14 January 15, 2009

[url]http://www.dol.gov/esa/whd/opinion/FLSA/2009/2009_01_15_14_FLSA.pdf[/url]

[pattytx]

Which is what every responder already told the OP.