I have a manager whom I have classified as “exempt” from overtime. This manager engaged in workplace misconduct. Can I suspend this manager for three days and deduct three days of pay from the manager’s salary under the Fair Labor Standards Act (“FLSA”)?
Yes, the FLSA regulations permit an employer to suspend an exempt employee and deduct pay in full day increments, so long as the suspension satisfies two criteria. 29 C.F.R. § 541.602(b)(5). First, the manager must be suspended for serious workplace misconduct, such as sexual harassment, violence, drug or alcohol violations, or violations of state or federal laws. The term “misconduct” does not include an employee’s attendance or general performance problems. 29 C.F.R. Part 541, Preamble, Fed. Register, Vol. 69, No. 79, April 23, 2004 at 22177.
Second, any pay deduction for workplace misconduct must be imposed pursuant to a written policy that applies to all employees. The written policy does not need to list every specific violation that could result in a suspension, but it must put employees on notice that they could be suspended without pay. 29 C.F.R. Part 541, Preamble, Fed. Register, Vol. 69, No. 79, April 23, 2004 at 22178. For example, the “written policy” requirement for this exception would be satisfied by a general written anti-drug policy distributed to all employees that warns them that violations of the policy may result in their unpaid suspension.
For more information, please contact Mitchell W. Quick, a partner in Michael Best's Labor and Employment Relations Practice Group at 414.225.2755, or by e-mail at firstname.lastname@example.org.