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FLSA exempt salaries: Cutting pay and hours by 20%

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in Leaders & Managers,Management Training

Q. We’ve begun paying FLSA exempt employees 20% less per week and asking them to work 20% fewer hours. Some still continue to work far more hours. Can we legally do this, or must the employees report the actual number of hours they worked on their time sheets, even though they’re only receiving 80% of their regular salaries? — J.T., Georgia

FLSA exempt employees must be paid the same salary each week regardless of how many hours they work. It is permissible to reduce their work schedules prospectively and to reduce their pay in accordance with their reduced schedules. The reduced schedules, however, must be bona fide changes and not designed to pay the employees less for working essentially the same schedules they did before the change.

They should report the actual number of hours they work and should be paid the same amount each week even if their hours fluctuate. However, their hours should generally be in the range of the hours set by the reduced schedules.

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