Reductions in Salary of Exempt Employees
To outline the conditions under which an exempt employee's salary may be reduced pursuant to the Fair Labor Standards Act (FLSA).
All exempt employees.
The Fair Labor Standards Act (FLSA) requires that exempt (salaried) employees must be compensated on a “salary basis." The salary of an exempt employee cannot be reduced because of variations in the quality or quantity of work performed. The exempt employee must be paid a full salary for any week in which the employee performs any work. No salary is to be paid, or paid leave reported, in any workweek when no work is performed.
Reductions in the Salary of an Exempt Employee are Limited to the Following Situations:
- Absences from work for one or more full days for personal reasons, other than sickness or disability when the employee has no paid leave to cover the time off will result in a salary reduction in full-day increments and will be Leave Without Pay (LWOP);
- Absences from work for one or more full days due to sickness or disability when there are not enough sick leave hours available to cover a full day’s absence will result in a salary reduction in full-day increments and will be LWOP;
- Any absence designated as approved LWOP;
- Penalties imposed in good faith for violating safety rules of “major significance” as defined below;
- Unpaid disciplinary suspension of one or more full days imposed in good faith for violations of workplace conduct rules;
- A proportionate part of an employee’s full salary may be paid for time actually worked in the first and last weeks of employment;
- Unpaid leave taken pursuant to the Family Medical Leave Act (which may be taken in less than half or full-day increments);
- Reductions in salary due to required furloughs of a full workweek period or longer;
- Reductions in salary due to budgetary constraints; or
- A permanent full-time equivalent (FTE) reduction to the employee's appointment.
None of the above exceptions affect the requirement that employees use Sick Leave, Shared Leave, Parental Leave, Vacation Leave, and/or Holiday and Holiday Compensatory Time in half or full-day increments.
If an exempt employee believes that their salary was reduced improperly, that employee should contact the Department of Human Resource Management at firstname.lastname@example.org or 785-864-4946.
For any reductions that are found to be improper, action will be taken to correct the error and ensure such reductions do not occur again.
Furlough periods for less than a full bi-weekly pay period will require the exempt employee's position to be changed to non-exempt/hourly for the period in which the furlough occurs.
Reductions in salary and/or FTE reductions may impact the designation of a position's exempt status if the weekly wage is lower than the designated U.S. Department of Labor wage determination threshold and duty assignment test.
Human Resource Management
103 Carruth-O’Leary Hall
1246 W. Campus Road
Lawrence, KS 66045
Safety rules of "major significance" include those related to the prevention of loss of life or serious bodily injury.
08/07/2020: Revised through an expedited process in order to provide guidance given concerns related to COVID-19; updated to current standards.
03/08/2017: Updated Date Last Reviewed field.
07/11/2016: Updated to remove gendered pronouns.
10/21/2015: Updated name from HR to HRM; clarifies leave and FTE reduction provisions.
01/21/2015: Policy formatting cleanup (e.g., bolding, spacing).