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California California
Salaried Employee Law ::
Salaried
Employee Labor Law Definition
True salaried
employees regularly receive a predetermined amount of
compensation each pay period (on a weekly or less frequent
basis).
Salaried
employees are paid the same amount each week no matter how
much work they do or how many hours they work. They must
receive a full salary for any week in which they perform any
work "without regard to the number of days or hours worked."
29 CFR § 541.118(a).
According to a Department of Labor interpretation, "An
employee is not paid on a salary basis if the employer makes
deductions from the predetermined salary, for example, for
absences caused by the employer or because of the operating
requirements of the business. If the employee is ready,
willing and able to work, deductions may not be made for
time when work is not available."
The compensation
cannot be reduced because of variations in the quality or
quantity of the work performed.
"Salary basis"
means the employee's compensation may not be reduced because
of:
Lack of work: or
Variations in the "quality or quantity of the work
performed", or
Disciplinary reasons except penalties imposed "for
infractions of safety rules of major significance."
Deductions from pay for time missed may destroy an
employee's exempt status. Employers may deduct from an
employee's salary for an unexcused absence for a full day on
which work is not performed, where the absence is due to
personal reasons other than sickness or accident. But the
employer may not deduct for absences due to sickness or
injury for less than a week or for less than a week's
absence for jury duty, witness appearances or military duty,
except the can claim a deductions for fees (such as jury
duty fees) received by the employee.
Employers should be careful when suspending employees
without pay, because an improper suspension may jeopardize
the salary
basis test.
Suspension for violations of major workplace safety rules
does not affect an employee's salaried status.
Salaried employees suspended for less than full week are
entitled to a full week's pay. On the other hand, salaried
employees can be suspended for a full week without pay and
retain their exempt status.
The new regulations adopt by the U.S. Department of Labor
permit disciplinary deductions in pay for a full day or
more, imposed in good faith for infractions of workplace
conduct rules. The effect of this on California employees,
governed by California, has yet to be determined by the
courts. However, since Legislature and Industrial Welfare
commission created the California rules prior t the new
Federal Regulations on August 23, 2004, it appears that the
old regulations should be used.
There
are seven exceptions to the "no-Docking" rule in the U.S.
Department of Labor's
Regulations
The U.S. Department of Labor gives the following seven
exceptions to the salary basis test's "no pay-docking"
rule:
1. An absence from work for one or more full days for
personal reasons, other than sickness or disability,
2. An absence from work for one or more full days due to
sickness or disability if deductions made under a bona fide
plan, policy or practice of providing wage replacement
benefits for these types of absences,
3. To offset any amounts received as payment for jury fees,
witness fees, or military pay,
4. Penalties imposed in good faith for violating safety
rules of "major significance", such as "no smoking" rules,
rules in explosive plants, oil refineries, and coal
mines,
5. Undpaid disciplinary suspension of one or more full days
imposed in good faith for violations of workplace conduct
rules, such as rules prohibiting sexual harassment or
workplace violence,
6. Proportionate part of a n employee's full salary may be
paid for time actually worked in the first and last weeks of
employment,
7. Unpaid leave under the Family Medical Leave Act.
Must
be paid the full salary for any week in which the employee
performs any work
If an employee performs no work during the pay period, then
the employer can be excused from paying a salary. However,
if any work is done, then the employee should receive
a full weeks salary. Under the federal law, the only
exception to this appears to be that the first and last
weeks salary can be prorated.
The
exemptions require that an employee must be paid at least
double the California minimum wage for full time
employment
This is related to but not part of the salary basis test. To
be exempt under California law, an employee must also earn a
monthly salary equivalent to no less than two times the
California minimum wage for full-time employment. California
minimum pay as of this writing (September 23, 2005) is $6.75
per hour. Full-time employment is 40 hours a week, so the
requirement is approximately $28,000 a year.
The federal law requires that employees be paid at least
$455 a week.
There
are many exceptions to the salaried basis test
The
law provides the employers with several defenses:
1. The "window of correction" rule - This rule
provides that, despite an improper deduction, the exemption
is not lost if an employer 1) has such a clearly
communicated policy which prohibits improper deductions and
includes a complaint mechanism, 2) reimburses employees for
any improper deductions, and 3) makes a good faith
commitment to comply in the future. In such a case, the
employer will not lose the exemption for any employees
unless the employer willfully violates the policy by
continuing to make improper deductions after receiving
employee complaints. This exists under both California and
federal labor law.
2. Fee Basis payments - This is a new federal
concept, and it should not apply in California.
Administrative and professional employees may also be paid
on a fee basis rather than on a salary basis. An employee is
paid on a "fee basis" if the employee is paid an agreed sum
for completing a single and unique job, regardless of the
time required to complete the work. Payment on a "fee basis"
is not available for a series of non-unique jobs repeated an
indefinite number of times for which payment on an identical
basis is made over and over again. Payments based on the
number of hours or days worked and not on the accomplishment
of a single, unique task are not payments on a fee basis.
Payment has to be at least $455 a week.
The law does not require that a salary be paid to some
employees:
Computer software employees. Under California law, they need
to be paid an hourly amount of $41 per hour as of January 1,
2001. Every year, this amount adjusts upwards. To determine
the current rate Click
Here.
Under federal law, they must be paid $27.63 per hour.
Outside sales employees (California and federal).
Doctors, Lawyers and Teachers (federal only).
by Matthew A. Kaufman, Esq.
Harris &
Kaufman Labor Lawyers Can Help You
Harris &
Kaufman is a California law firm that's dedicated to
representing employees in disputes against their employers
to do with the California Labor Laws. Our lawyers can assist
you if you believe that your employer has broken the
California Employment Laws.
To
email William E. Harris about a claim you may have
Click
Here
California
Salaried Employee Definition & Salaried Employee Law Ca
State Page Summary: Find a definition about
California Labor & Employee Laws to do with salaried
exemptions.
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