UIC HR Compensation Confidential November 2008 S 1
The FLSA
What You Need to Know
University of Illinois at Chicago
Office of the Vice Chancellor for Human Resources
Compensation
2009
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UIC HR Compensation Confidential November 2008 S 2
Frequently Asked Questions
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UIC HR Compensation Confidential 15 May 2007; S 3
Overtime
Question:
If an employee is exempt, can you still choose to classify him as
nonexempt and pay him hourly with overtime?
Yes, you can classify an employee as hourly and pay the
employee overtime, even employees who could otherwise
pass the exemption test.
2005 B LR Business and Legal Reports 22
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UIC HR Compensation Confidential 15 May 2007; S 4
Salary Basis
Question:
Can an exempt employee be paid additional compensation without
jeopardizing the exemption status
Yes. An employer may provide an exempt employee with
additional compensation without losing the exemption or
violating the salary basis requirement, if the employment
arrangement also includes a guarantee of at least the
minimum weekly-required amount paid on a salary basis.
Caveats: pay basis, duties performed
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UIC HR Compensation Confidential 15 May 2007; S 5
Overtime
Question:
We have an employee who has 2 jobs, one is exempt and the other
non-exempt. Do I need to pay her overtime for non-exempt
duties?
If an exempt employee works a second non-exempt job, it
will likely compromise the employee’s exempt status.
Please contact the Compensation Department for
interpretation of UIC Policies
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UIC HR Compensation Confidential 15 May 2007; S 6
Salary Level
Question:
We have an employee in a management position who is paid by the hour.
She earns over $455 per week. She also meets the duties test for the
executive exemption. First would this employee be non-exempt? And if
so, is it legal to give her an extra week of vacation to cover any overtime?
Anyone paid on an hourly basis other than certain employee
groups such as exempt computer professionals, would be
nonexempt and entitled to overtime.
Providing vacation rather than overtime payment is not legal
under the FLSA. This person is entitled to overtime for
any hours worked over 40 in one week
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 7
Salary Level
Question:
Is it legal to pay overtime with compensatory time in lieu of cash?
Not in the private sector. However, the Act provides an
element of flexibility to State and local government
employers. The exemption authorizes a public agency to
provide compensatory time off (with certain limitations).
There are several rules to consider.
DOL 29 CFR 553.20 Introduction
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UIC HR Compensation Confidential 15 May 2007; S 8
Salary Level
Question:
Do general standards exist for exempt employees in regards to extra work
above and beyond the normal work week? For example, if they travel
during the weekend for work, is it expected that they would get a day off
later in compensation for this weekend work?
UIC does not expected that an exempt employee receive a
day off work after working on a Saturday or Sunday.
Exempt employees are expected to work when duty calls.
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 9
Deductions from Pay
Question:
What are the rules for deducting pay for violating safety rules?
Deductions from pay of exempt employees may be made in certain
circumstances. One includes penalties imposed in good faith for
infractions of safety rules of major significance. These include
infractions relating to the prevention of serious danger in the
workplace toward other employees. For example (from DOL),
includes rules prohibiting smoking in explosive plants, oil
refineries and coal mines
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Deductions from Pay
Question:
If we suspend an exempt employee for disciplinary reasons do we
have to pay that person?
Deductions from pay of exempt employees may be made for
unpaid disciplinary suspensions of 1 or more full days, if
imposed in good faith for infractions of workplace conduct
rules. There must be a written policy applicable to all
employees, (e.g. suspension for violating sexual
harassment or workplace violence)
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 11
Salary Deductions
Question:
We have an exempt employee out 2 days per week on leave under the
Family and Medical Leave Act (FMLA). Do I have to pay him for the
entire week?
No. An employer is not required to pay the full salary for
weeks in which an exempt employee takes unpaid leave
under the FMLA.
And this is the only time you can deduct actual hours taken
for exempt employees
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 12
Salary Deductions
Question:
Can an employer deduct paid benefit leave, such as sick leave or personal
leave, in half-day increments from an exempt employee if it is a written
UIC policy?
Yes, you can deduct less than a day’s time from an exempt
employee’s allotted sick, vacation, or personal accrued
bank time. You cannot deduct from an exempt
employee’s paycheck for less than a day’s absence for
sickness, disability or sick leave.
(Please see policy HRPP 808)
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 13
Salary Level
Question:
If an employee needs to be out for a period that is less than a half day or full
day, can the unit require that the employee use leave benefits?
No , the unit cannot require that an employee use half-day or
full-day leave benefits if the employee does not need to be
out for that duration.
8/28/06 memo from University HR
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Salary Level
Question:
Should employees accumulate or bundle time for multiple absences to reach
the half-day or full-day increments?
NO.
Only report usage against leave banks in half or full day
increments for a single day.
8/28/06 memo from University HR
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UIC HR Compensation Confidential 15 May 2007; S 15
Salary Level
Question:
If I am a full time exempt employee, how do I report an absence that
is 5, 6 or 7 hours?
40 hour per week, full time employees should report
absences in 4 or 8 hour increments only; therefore you
would report an absence of 5, 6, or 7 hour absence as 4
hours against accrued bank time.
8/28/06 memo from University HR
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UIC HR Compensation Confidential 15 May 2007; S 16
Salary Level
Question:
If an exempt employee calls in sick for a whole day and doesn’t have
any accrued sick time on the books, can we dock her pay for the
day?
Yes.
As long as the deduction is made in accordance with a bona
fide UIC plan, policy or practice of providing compensation
for loss of salary caused by this type of sickness or
disability. Remember though, that you cannot deduct pay
for less than 1 day’s absence (even when the bank is
negative)
2005 B LR Business and Legal Reports 18
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UIC HR Compensation Confidential 15 May 2007; S 17
Salary Level
Question:
If an exempt employee calls in sick for half a day and doesn’t have
any accrued sick time on the books, can we dock her pay for the
time?
No.
You cannot deduct pay for less than 1 day’s absence (even
when the bank is empty or negative)
DOL Opinion Letter – Jan 7, 2005 = FLSA2005-7
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UIC HR Compensation Confidential 15 May 2007; S 18
Overtime
Question:
How should managers address issues with employees who are
consistently absent in less than half-day or full-day increments?
Unit managers and supervisors have the right to address
performance issues related to attendance if work effort or
commitment is unsatisfactory, which can ultimately lead to
discipline and/or termination. Contact the appropriate
campus HR office for assistance in dealing with these
situations
8/28/06 memo from University HR
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UIC HR Compensation Confidential 15 May 2007; S 19
Overtime
Question:
Some of our employees work 24 hour shifts, and we allow them to
sleep at night. Are we supposed to pay them for this time?
Sleep time is not considered hours work if it satisfies all of the following:
- EE is on duty 24 hours or more
- EE and ER agree to exclude from work hours bona fide meal periods and a bona
fide, regularly scheduled sleeping period of not more than 8 hours
- ER furnishes adequate sleeping facilities and the EE can usually enjoy an
uninterrupted sleep period
- The sleep period is uninterrupted. If the EE is awakened and asked to perform work,
that time is counted as work; if the EE gets less than 5 hours of sleep, the entire
sleep period must count as hours worked.
2005 B LR Business and Legal Reports 33
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UIC HR Compensation Confidential 15 May 2007; S 20
Overtime
Question:
At times our non-exempt employees travel to another worksite past
their normal work hours. Do we have to pay them for the time
they are driving to the second site?
Travel to and from work or travel outside of the normal workday is generally
not considered compensable. However, exceptions include (i.e. travel
time must be counted if)
- Time spent traveling from one worksite to another
- Driving during normal workday to fulfill employer requirements
- EE has gone home from the day’s work and is called out again to travel
a substantial distance to do emergency work for a customer
2005 B LR Business and Legal Reports 37
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UIC HR Compensation Confidential 15 May 2007; S 21
Overtime
Question:
Do we have to pay employees for on-call time?
Yes, if the employee is required to remain on call on the employer’s
premises or so close thereto that he cannot use the time effectively
for his own purposes.
No, if an employee is not required to remain on the ER’s premises but
is merely required to leave word at his home or with company
officials where he may be reached.
DOL 29 CFR 785.17 On call time
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UIC HR Compensation Confidential 15 May 2007; S 22
Overtime
Question:
Sometimes we offer training to our employees. Since we are paying
for the training, do we have to pay the employee?
Anytime that an employer requires an employee to attend training
during work hours, that time will be considered work time.
Training is not considered hours worked if all of the following are
met:
- Meetings are held outside of work hours
- Employee attendance is voluntary
- Training is not directly related to the ee’s job
- Employee does no work during the training time
- The course is held after work and is not a requirement even if
the subject matter pertains to the job
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UIC HR Compensation Confidential 15 May 2007; S 23
Exemption
Question:
Does a bachelor’s degree in the field related to the position help to
support that the position has discretion and independent
judgment, and does the DOL look at that particular element?
You have to review the job duties to determine the level of
discretion and independent judgment. Often times, jobs
that require a high level of education also require
discretion and independent judgment, but they are 2
separate factors and must be considered independently
from one another.
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 24
Salary Level
Question:
What is meant by must exercise discretion and independent
judgment, don’t we all use this in our jobs?
This involves the comparison and the evaluation of possible courses of
conduct, and acting or making a decision after the various
possibilities have been considered.
For example, whether the employee has authority to formulate, affect,
interpret, or implement management policies or operating practices,
commit the employer in matters that have significant financial
impact, negotiate and bind the company on matters of significance,
can waive or deviate from policy without prior approval, etc.
DOL 29 CFR 541.202
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Salary Level
Question:
Is keeping a log sheet for exempt employees to sign in and out as
they arrive and leave the office legal if mandated by the
employer?
Yes, it’s legal..
Remember though, you’re not tracking hours
2005 B LR Business and Legal Reports
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UIC HR Compensation Confidential 15 May 2007; S 26
Overtime
Question:
Can employers “make” non exempt employees work overtime?
Under FLSA, there are no maximum hour limitations (e.g.
restrictions on the number of hours an employee may
work in one workday, workweek, or work period) for adult
employees. The Act merely requires overtime pay for the
time worked in excess of 40 hours per week
SHRM Legal Report , June 2206
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UIC HR Compensation Confidential 15 May 2007; S 27
Deductions
Question:
Can employers deduct money owed to the company from
non-exempt employee’s paychecks?
Under the FLSA, the applicable minimum wage must be paid to
employees free and clear except that deductions are permitted
for the reasonable cost of fair value of board, lodging or other
facilities. Deductions for items other than facilities are permitted
so long as they don’t reduce the employee’s wage below the
minimum and the employer does not directly, or indirectly derive
any profit or benefit from the transaction. See state law
SHRM Legal Report , June 2206
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