Does docking pay affect FLSA status? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Does docking pay affect FLSA status?

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in HR Management,Human Resources

Q. I recently docked one of my salaried employees’ pay for damage he caused to his company vehicle. My HR director said that by doing so, we might have made the employee eligible for overtime pay. Is this true?

A. To be exempt under the Fair Labor Standards Act (FLSA), employees must meet both the duties test and the salary test. Under the duties test, the employee must satisfy specific requirements spelled out under FLSA regulations. For a full explanation, see the HR Specialist white paper Complying With the FLSA Overtime Rules.

To meet the salary test, employees must receive a predetermined salary amount each pay period. That amount cannot be subject to reduction because of the quantity or quality of work performed. With limited exceptions, the employee must receive the full salary for any week in which the employee performs any work.

Therefore, unless your employee has agreed to the reduction in his pay to repay a debt to you, your HR director is correct.

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