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

[FlyingRon]

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.

The argument in the strawman I proposed is NOT a reduction. There's no requirement that a salaried exempt employee be paid 52 weeks a year. Just that the agreed salary can't be reduced arbitrarily.

Of course, Ann has come back and pointed out that her case is indeed the second case I stated, which is clearly illegal.

 

[PayrollHRGuy]

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 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.

The January 2020 change in the OT Exemption is a matter of how much you are paid per week. Since we haven't yet reached 2020 and you haven't yet been shorted the two weeks why do you think you are misclassified at this time?

 

[Annmarie266]

I think I am misclassified because I looked into what it means to be exempt and I don’t fall into any of those categories. I am not in management and more than half of my coworkers that make up the department only have a high school education and no formal training is required for the job. I also do not do administrative work or anything that has to do with computer programming. I am a project coordinator for a company that makes hair care products.

 

[Annmarie266]

The argument in the strawman I proposed is NOT a reduction. There's no requirement that a salaried exempt employee be paid 52 weeks a year. Just that the agreed salary can't be reduced arbitrarily.

Of course, Ann has come back and pointed out that her case is indeed the second case I stated, which is clearly illegal.

So just to clarify, my contract says I am to be paid 50k per year and each week that we get paid my gross is $960.

 

[Annmarie266]

So just to clarify, my contract says I am to be paid 50k per year and each week that we get paid my gross is $960.

The company is closing down from dec. 19th till January 6th and throughout that entire time we do not get a paycheck.

 

[cbg]

Are we quite certain that this is a binding contract and not a (probably non-binding) offer letter?

 

[bcr229]

You can consider contacting the state about the misclassification.

And... if you should have been classified as non-exempt then you can file a wage claim with the state. There is info on how to do so at https://www.dir.ca.gov/dlse/dlseWagesandHours.html

 

[Annmarie266]

Are we quite certain that this is a binding contract and not a (probably non-binding) offer letter?

Yes you are right it was an offer letter. How does that make a difference?

 

[Annmarie266]

By the way, I just want to thank all of you for helping me in this situation. I really appreciate it so very very much. Thank you for taking the time to respond.

 

[Annmarie266]

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

I am not getting my full salary.

 

[cbg]

It makes a difference because it is rare that an offer letter is actually contractual. Which means if you get 50/52 of your full salary the law is unlikely to intervene.

 

[PayrollHRGuy]

It makes a difference because it is rare that an offer letter is actually contractual. Which means if you get 50/52 of your full salary the law is unlikely to intervene.

Agreed, But it would disqualify the OT-Exempt status. A status that may not be legal anyway.

I think I am misclassified because I looked into what it means to be exempt and I don’t fall into any of those categories.

I am a project coordinator for a company that makes hair care products.

You might want to read this https://www.nolo.com/legal-encyclopedia/do-you-have-overtime-case.html about your possible misclassification.

And when the company closes go file for unemployment for those two weeks. There is likely a one week waiting period but their response to the claim may well provide some useful information that you can use for an overtime claim.

 

[bcr229]

Secure copies of your timesheets starting from your first workday up through now in case you do need to submit a wage claim for OT so you can prove your hours worked. If you've been working 50-60 hours per week for months that's a decent sum for your employer to have to pay out, so expect them to fight that as well.

 

[cbg]

It would only disqualify them from the exempt status for the two weeks that they were not getting paid. It would not disqualify the status overall.

 

[PayrollHRGuy]

It would only disqualify them from the exempt status for the two weeks that they were not getting paid. It would not disqualify the status overall.

Only if the employer agrees that in the future such action won't be taken. The employer can't bounce and employee or group of employees back and forth between exempt and non-exempt status.