Though many employers raise high-performing workers to exempt salaried status, this designation often holds little or no benefit for the employee. Despite widespread belief that exempt salaried employees will receive pay regardless of the amount of work performed, these employees have very few rights under the United States Fair Labor Standards Act.
The primary distinction between hourly workers and exempt salaried employees, according to the Fair Labor Standards Act reference website FLSA.com, is that the salaried employee does not receive extra compensation for extra, unscheduled hours worked during a period of time. In many companies, hourly workers receive a predetermined wage for hours worked through 40 hours in a week, and then receive a higher wage, sometimes known as "overtime pay," for additional hours worked; salaried employees, in contrast, receive only one set wage regardless of any additional time served. According to FLSA.com, exempt salaried employees must work in a position that passes a number of tests to become exempt from overtime pay; these tests include the type of work performed and the amount of annual compensation.
No Compensatory Time
In some organizations, managers may offer an exempt salaried employee time off for extra hours worked in lieu of overtime pay. According to Lee and Braziel, a law firm specializing in compensation legal matters, many offers of compensatory time violate the Fair Labor Standards Act. Instead, an employee who receives an offer of comp time in exchange for overtime hours worked may have the right to request a review of the work and receive financial compensation instead of paid time away from the office.
Partial Days Worked
According to the portion of the Fair Labor Standards Act that governs overtime pay and treatment of exempt salaried employees, employers must pay a minimum guaranteed wage to exempt employees for each period during which the employees perform work. Depending on the company's practices, an organization may define a period as a day, a week, a month or any other duration of time. If an employee works during that period of time, the employer must compensate the employee for the full period regardless of whether the employee works the entire period or only a portion. In an organization that defines a period of time as a week and sets exempt salaried employee pay by the week, for example, the employer must pay the worker for an entire week even if the employee works only three days. Similarly, an employer that defines a period as one day must pay an exempt salaried employee for a full day even if he only works a few hours.
Though many employers offer generous sick day allocations for exempt salaried employees, and some even offer casual sick days that do not require use of available vacation days, the Fair Labor Standards Act places no requirement on employers to make such arrangements. According to FLSA.com, an employer may require an exempt salaried employee to use available vacation days or paid time off days when he cannot report to work due to illness, and some employers may withhold payment altogether.
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