Can an Employer Tell Its Exempt Employees to Take a Week Off?

To qualify as a worker that's exempt from the federal Fair Labor Standards Act, the employee must work on a salary basis, and receive the same amount of pay each week no matter how much work they perform. While single-day furloughs are an easy way for managers to curtail payroll expenses when managing non-exempt, hourly employees, the FLSA prohibits the practice for exempt employees. Employers who furlough exempt employees for an entire pay period, however, don't run afoul of FLSA standards.

Fair Labor Standards Act and Exempt Employees

Some positions may occasionally be required to work more than 40 hours a week. To allow employers the flexibility to deal with salaried employees who work overtime, the FLSA establishes exemptions for certain salaried employees. These employees must receive the same amount of pay each week they come to work, regardless of how much they actually perform. This allows exempt employees the ability to work overtime without receiving overtime pay while also guaranteeing they receive pay even for weeks they do little.

FMLA and Furloughs

Because exempt workers must receive their standard paycheck for any week in which they perform any work at all, merely mandating they stay home a day a week, and thus receive 20 percent less pay for the week, doesn't meet FMLA exemption standards, and employees may lose their exempt status, requiring employers to pay overtime wages for all overtime hours. If an employer requires an exempt employee to take an entire week off and not perform any work for a full pay period, the employer may legally withhold the exempt employee's standard pay, as he performed no work that week.

Risks of Exempt Furloughs

For an employee to maintain his exempt status during a week-long -- or lengthier -- furlough, the worker must perform absolutely no job duties during the furloughed week. This includes even casual communication with the workplace, through telephone calls or emails, which may be interpreted by the courts that the exempt employee performed work during the pay period, requiring that employers pay the employee or reclassify them as nonexempt. Because of this, many companies that furlough employees for a week employ strict policies that workers on furlough are to have no contact to the workplace during their mandatory week off.

Holiday Shutdowns

The employer doesn't need to provide a furlough system to legally mandate that exempt workers take a week off, and many businesses use holiday shut-down periods to manage payroll costs. These company-wide furloughs must still meet FLSA standards, and exempt employees may not perform work of any sort during the shutdown period. A company-wide shutdown, however, may reduce the risk that furloughed workers will contact others still at work and perform work duties.

References

• U.S. Department of Labor: Frequently Asked Questions Regarding Furloughs and Other Reductions in Pay and Hours Worked Issues
• Barran Liebman, Attorneys: Don't Let Wage and Hour Issues Be a Lump of Coal in Your Stocking
• Corporate Counsel; Furloughs May be Smarter than Layoffs; Eric Bellafronto and Blaire Cleveland; March 2009
• FLSA.com: FLSA Coverage