During FMLA, you can pay exempt workers by the hour

The job description for Doris Rowe's position as a bus company supervisor noted the job was "FLSA: EXEMPT." She was paid a fixed salary every two weeks regardless of the number of hours worked.

When Rowe exhausted her sick leave and vacation time after a serious ankle injury, the company allowed her to work part time. During that time she was paid by the hour. The following year she resigned and sued, claiming the company failed to pay her overtime under the Fair Labor Standards Act (FLSA).

The 9th U.S. Circuit Court of Appeals, however, said the fact that Rowe was paid by the hour while on a partial schedule didn't affect her exempt status under the FLSA.Paying an exempt employee by the hour when on a reduced schedule under the Family and Medical Leave Act (FMLA) doesn't change the employee's exempt status. Although the bus company never designated Rowe's part-time schedule as FMLA leave, the court said the leave was entitled to that protection. (Rowe v. Laidlaw Transit Inc., No. 00-35197, 9th Cir., 2001)

Advice: There is one sure-fire way to cut down on

misunderstandings about FMLA time: designate, designate, designate! Although the bus company eventually won, the case probably would not have been fought if the employer had properly designated the FMLA leave and notified the employee, since the law is clear that reducing pay for leave time doesn't affect FLSA status.