Can Your Employer Dock Your Salary?

If They Do, You May Be Entitled to Overtime Pay

When you’re a salaried employee, you’re usually exempt from the Fair Labor Standards Act (FLSA). That means you’re not entitled to receive minimum wage or overtime pay.

A number of things can affect your exempt or non-exempt status, including your pay level and job description. In addition to meeting certain earning thresholds on a salary basis, employees must meet a duties test to determine whether they are exempt from FLSA protections.

However, some things can change your status from exempt to non-exempt (and thus entitled to FLSA protections, including overtime pay and minimum wage). If your employer is misclassifying you, then you may be entitled to back pay for any overtime you worked during a non-exempt period.

One of those situations is when your employer docks your pay.

What Qualifies You as “Exempt”?  

Being exempt from FLSA protections is tied to several different factors, including how much you make, how you’re paid, and your job duties. Salaried employees are exempt, and there’s an income threshold above which employees are generally exempt as well.

There are specific elements that define whether you count as “salaried.” These include:

• You get paid the same amount on a regular weekly or monthly basis, regardless of how much time you worked.
• Your pay doesn’t change based on the quality or quantity of the work you perform.
• You get the full amount of your salary for all weeks in which you work, no matter how many days or hours you work.
• You make a minimum of $684 per week (at the federal level; some states have higher thresholds).

If your employer docks your pay and it puts you below the threshold minimum, this may change your status from exempt to non-exempt—and you may be entitled to overtime pay for the period during which you were non-exempt.

When Can Your Employer Deduct Pay?

Your employer can deduct pay if you’re off work for a day more due to personal reasons not related to sickness or disability. Federal courts have found in the past that employers can’t deduct pay for absences of less than a day—so you receive the full day’s pay even if you show up to work for just a few minutes.

However, your employer can deduct from your vacation time or other paid time off in hourly increments if you’re absent from work, as long as it doesn’t reduce your salary. That doesn’t change your exempt status. If your paid time off has been used up, your employer can’t dock your pay unless you’re out of work for the whole day.

If your absence is due to sickness or disability, the rules are a bit more complicated. Generally speaking, employers can deduct pay for one or more full days as long as you have a benefit plan that covers your salary when you’re absent for personal, sickness or disability reasons and you’ve used up all your PTO.

Otherwise employers can’t deduct pay in increments of less than a week. If an employee shows up for part of the week—even for part of a day—they must receive the full week’s pay.

There are some other situations where your employer is allowed to dock your pay, and it may not change your exempt status. These include:

• If you violated a major safety rule.
• To offset pay you received from Jury Duty, witness fees, or military enrollment. (But your employer can’t deduct a full day’s pay for your absence on top of that).
• If you’ve been suspended for violating rules of workplace conduct.
• If you quit your job in the middle of a week, your employer is allowed to pay for only the days worked in that workweek.
• If you’re on a reduced schedule under the FMLA, your employer may be able to pay you on an hourly basis without changing your exempt status.

Is Your Employer Deducting From Your Pay? You Should Speak to an Attorney 

If your employer is making inappropriate deductions to your salary, you should speak to a knowledgeable employment attorney. The rules for making deductions to salaried employees’ paychecks are complicated, and you may be eligible for back overtime pay without knowing it.

We’ve helped hundreds of employees gain restitution in just this situation. Call us at 267-273-1054 or email us at murphy@phillyemploymentlawyer.com for a free, confidential consultation today. 

The information provided here does not constitute legal advice. It is intended for general purposes only. If you have questions about a specific legal issue, you should speak to an attorney.