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DOL Opinion Letter on Salaried Employees’ Failure to Meet Work Hours

Volume 5, Issue 9
July 27, 2006

The Department of Labor ("DOL") has issued an opinion letter regarding exempt employees and discipline for failure to meet work hours which applies the new regulations regarding salary deductions for discipline. The opinion letter, issued on March 10, 2006, demonstrates the limits of the new regulation which permits one or more full-day disciplinary suspensions for an exempt employee's violation of "workplace conduct rules."

An employer wrote to the DOL regarding two new job requirements it wished to implement with regard to exempt employees. First, the employer intended to require exempt employees to work either 45 or 50 hours per week, depending on their job title. Second, exempt employees would be required to make up work time lost due to personal absences of less than one day. The employer did not plan to dock the salary of any exempt employee for failing to meet these requirements, but did intend to discipline employees for consistent failures to follow the proposed rules. The employer asked the DOL whether implementing its proposed requirements would jeopardize the exempt status of the employees.

The DOL explained that because the salary of the exempt employees would not be docked for their failure to meet the proposed requirements, the employer was free to implement the rules without losing the exemption. The DOL stated: "The number of hours worked by an employee who is exempt [under the executive, administrative, professional exemption] 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."

The DOL cautioned, 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 of one or more full days pursuant to the new regulations. While the employer can freely issue a verbal or written warning or discharge an employee for such infractions where appropriate, any suspensions issued must be for a full work week because the proposed rules relate to attendance instead of workplace conduct. The DOL reminded the employer that the new regulation which permits disciplinary suspensions of less than one week applies only to violations of "workplace conduct rules" which does not encompass performance or attendance issues.

The opinion letter serves as a reminder to carefully scrutinize changes in policies for exempt employees to determine whether they will impact the employees' exempt status. Moreover, the opinion letter demonstrates how the DOL will apply the new regulation regarding disciplinary suspensions.

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