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When Can Employers Dock the Pay of Exempt Employees?

Posted on behalf of Peter T. Nicholl in Unpaid Overtime May 07, 2019

giving out paycheckSome employees are exempt from overtime and minimum wage laws because of the amount they are paid and various aspects of their work. These workers are paid on salary, instead of a fixed wage for the number of hours worked.

This obviously has advantages for the employee, but the employer may not like having to keep paying the employee if he or she does substandard work or he or she is not completing the amount of work the employer wants. While federal law prohibits an employer from docking pay of employees based on the quality or quantity of work, there are some situations where pay docking of salaried workers is permitted.

Below, the experienced Maryland unpaid overtime lawyers at Peter T. Nicholl Law Offices explain when employers can dock the pay of salaried employees. If you were illegally denied wages in violation of federal law, we are here to review your situation and provide trusted representation throughout the legal process. Schedule a free legal consultation right now.

Exceptions to Pay Docking Laws

The Fair Labor Standards Act (FLSA) sets rules for docking pay for salaried employees. In most situations, this practice is illegal. Salaried employees, who are exempt from minimum wage and overtime requirements in the FLSA, must be paid a full weekly salary whenever work is performed, regardless of the number of hours or days worked. Salaried employees must also be paid if work is unavailable and the employee is able, ready and available to work.

However, there are some exceptions when an employer may be able to dock a salaried worker’s pay:

  • The employee is absent for one or more full work days for personal reasons
  • The employee is absent for one or more full work days due to illness or disability and the employer has a plan that compensates the employee for lost salary due to illness or disability
  • The employee performed no work for the workweek
  • The employer is imposing a penalty for a violation of a company policy, including for a violation of an important safety rule
  • The employee is on unpaid suspension due to breaking a conduct rule
  • The employee is on unpaid leave under the Family and Medical Leave Act
  • The employee received fees for jury service, military leave or being a witness and the employer deducts the normal pay to offset the amount the employee already received
  • At the beginning or ending week of employment when the employee only works a partial workweek

What Happens if My Pay is Illegally Docked?

If your employer violates the pay docking rules willfully, your employer can be subjected to substantial penalties, such as the loss of the overtime exemption for the period when pay was illegally docked.

If you take your employer to court, it will consider several factors to determine whether the employer engaged in the actual practice of improper pay docking, including:

  • The number of improper deductions
  • The time period when the employer made the improper deductions
  • The number of employees
  • The location of employees and managers
  • Whether the employer clearly explained the pay docking purpose and policy
  • Whether the deductions were permissible or not under the law

Losing the Overtime Exemption

If the court determines that the employer engaged in improper pay docking, the employer loses its overtime exemption for the period during which it made the improper deductions. This can affect the amount of pay that you and other workers in the same job classification and under the supervision of the same manager were entitled to receive during this time period. Employees are entitled to their regular wages, plus overtime pay for any hours that exceed 40 hours in a workweek.

If the improper deduction only occurred one time or was not intentional, the employer does not lose the overtime exemption, provided it reimburses the employee for the amount of the improper deduction.

Contact a Knowledgeable Attorney for Assistance

If you believe your pay was illegally docked, it is important to talk to a knowledgeable attorney who can determine if you have legal options. The attorneys at Peter T. Nicholl Law Offices are experienced at handling many types of wage and hour claims and can explain your rights during a free consultation.

Fill out a Free Case Review form or call us at 410-244-7005.

Contact our personal injury lawyers for a free consultation if you have been injured by another’s negligence. You may be entitled to compensation.

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