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Midweek terminations and the FLSA

by on
in Firing,Human Resources

Q. Our company recently terminated an exempt employee midway through a workweek. Given the requirement in the Fair Labor Standards Act (FLSA) that exempt employees be paid on a salary basis, I was wondering whether we are required to pay the employee for the entire week.

A.
As you are aware, an exempt employee must be paid on a salary basis—which generally means that he or she is entitled to his or her full salary for any week in which he or she performs any work.

However, the FLSA does not require an employer to pay an employee for full days that have not been worked because of termination. Consequently, you may prorate the worker’s pay based on the number of days actually worked.

This calculation is permitted when the employee begins or ends employment in the middle of a workweek (or another specific statutory exception applies). Reducing an exempt employee’s pay in other circumstances may jeopardize the worker’s status and entitle him or her to overtime.

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