Salary employee; company closes for two weeks of the year and employees are not paid for those two weeks

[Annmarie266]

What is the name of your state?california

 

[quincy]

What do you mean by the salaried employees not being paid?

 

[Taxing Matters]

Telling us that you are a "salary employee" does not tell us whether you are an exempt employee or not. Exempt employee meaning an employee exempt from the minimum wage and overtime requirements of the federal Fair Labor Standard Act (FLSA). If you are not exempt then the basic rule is that the employer is only obligated to pay you for time you actually work. If the employer shuts down for two weeks and you don't work during that time then you don't get paid. You might be eligible for unemployment comp for that period, though. The answer is a bit different if you are an exempt employee.

 

[PayrollHRGuy]

If, and only if, by salary employee you mean OT Exempt employee, your status as an OT Exempt employee should be lost under those conditions.

https://www.dol.gov/whd/regs/compliance/whdfs70.htm

An employer must pay an exempt employee the full predetermined salary amount "free and clear" for any week in which the employee performs any work without regard to the number of days or hours worked. However, there is no requirement that the predetermined salary be paid if the employee performs no work for an entire workweek. Deductions may not be made from the employee's predetermined salary 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. Salary deductions are generally not permissible if the employee works less than a full day. Except for certain limited exceptions found in 29 C.F.R. 541.602(b)(1)-(7), salary deductions result in loss of the section 13(a)(1) exemption.

 

[FlyingRon]

And if he is an exempt employee, it would matter if that the agreed-upon arrangement means he doesn't get a check those weeks. Plenty of exempt employees work in jobs that are not 52-weeks a year.

 

[PayrollHRGuy]

And if he is an exempt employee, it would matter if that the agreed-upon arrangement means he doesn't get a check those weeks. Plenty of exempt employees work in jobs that are not 52-weeks a year.

There may be a DOL opinion letter or decision out there supporting that but it is not one of the exceptions listed in 29 CFR § 541.602

 

[commentator]

File for unemployment insurance for those two weeks you are not paid. If you're eligible, one week will be a waiting week, will set up a claim, and the next week should be paid. They'll settle the issue of whether you're considered a paid employee during those weeks.

 

[FlyingRon]

There may be a DOL opinion letter or decision out there supporting that but it is not one of the exceptions listed in 29 CFR § 541.602

Eh? Nothing in 29 CFR 541.602 prohibits what we're talking about. It would one thing to shutdown and decide they aren't going to pay the "predetermined' salary. It's another to specifically schedule a shutdown and not issue checks that week.

For example, they say they'll pay me $100,000/year and give me 50 installments of that and then close up for two weeks at Christmas, is legal.

This rule is to ban them docking exempt employees the money they agreed to pay as sallary. It's illegal to say they will pay me $100,000, and pay me 1/52 of that each week and then decide they aren't going to pay me the last two weeks because they are closed.

 

[PayrollHRGuy]

Eh? Nothing in 29 CFR 541.602 prohibits what we're talking about. It would one thing to shutdown and decide they aren't going to pay the "predetermined' salary. It's another to specifically schedule a shutdown and not issue checks that week.

For example, they say they'll pay me $100,000/year and give me 50 installments of that and then close up for two weeks at Christmas, is legal.

This rule is to ban them docking exempt employees the money they agreed to pay as sallary. It's illegal to say they will pay me $100,000, and pay me 1/52 of that each week and then decide they aren't going to pay me the last two weeks because they are closed.

29 CFR 541.602(b) is a list of the exceptions to the no reductions rule. This case is not one of those exceptions. While I agree that your example of 50 weekly payments would be legal there is no mention of such an agreement here. Further, in the context of this post, (using your $100K example) 50 weeks at $1923.08/week would not be legal and neither would an agreement that the employee would be paid $1923.08/week.

 

[Annmarie266]

Eh? Nothing in 29 CFR 541.602 prohibits what we're talking about. It would one thing to shutdown and decide they aren't going to pay the "predetermined' salary. It's another to specifically schedule a shutdown and not issue checks that week.

For example, they say they'll pay me $100,000/year and give me 50 installments of that and then close up for two weeks at Christmas, is legal.

This rule is to ban them docking exempt employees the money they agreed to pay as sallary. It's illegal to say they will pay me $100,000, and pay me 1/52 of that each week and then decide they aren't going to pay me the last two weeks because they are closed.

My pay was calculated by dividing my total salary by 52. If they knew they would shut down for two weeks, why then wouldn’t the divide it by 50? So the contract that I signed states a certain amount per year but because we are not getting paid for two weeks, they aren’t paying me what it says on my contract. How can this be okay?

 

[quincy]

So you are not getting your full salary at all - or is your employer paying you late?

 

[Annmarie266]

Telling us that you are a "salary employee" does not tell us whether you are an exempt employee or not. Exempt employee meaning an employee exempt from the minimum wage and overtime requirements of the federal Fair Labor Standard Act (FLSA). If you are not exempt then the basic rule is that the employer is only obligated to pay you for time you actually work. If the employer shuts down for two weeks and you don't work during that time then you don't get paid. You might be eligible for unemployment comp for that period, though. The answer is a bit different if you are an exempt employee.

Also that is another issue about being classified incorrectly. I’ve read the laws pertaining to an exempt vs non exempt employee however, the laws are changing in 2020. I should be classified an non exempt but they are classifying me as an exempt employee meaning that I do not get overtime but at the same time every other person in my deptarrment is paid hourly and gets overtime. We all do the same thing and have the same titles so why is it that I am having to do about 50-60 hours a week and never get paid for overtime?

 

[Annmarie266]

So you are not getting your full salary at all - or is your employer paying you late?

I will not be getting my full salary. When I went into HR and told them my situation, they told me that there wasn’t anything they can do and that was just the way that the company runs. No one gets paid during the 2 week shut down.

 

[Annmarie266]

I have also tried to tell them that I am not being classified correctly yet they do nothing about it other than tell me that they will look into it. A few months go by and still they don’t have an answer for me.

 

[Zigner]

You can consider contacting the state about the misclassification.