NONEXEMPT VERSUS EXEMPT EMPLOYEES

As a preface to these questions, it’s important to note the difference between exempt (salaried) and nonexempt (hourly) employees. Because the purpose of this Q&A document is to address general handling of coronavirus situations, we will only address some basic guidelines regarding compensation.

Essentially, according to the Fair Labor Standards Act (FLSA), nonexempt employees are entitled to overtime and exempt employees are not. With few exceptions, an exempt employee must be paid at least $35,568 per year ($684 per week), be paid on a salary basis, and also perform exempt job duties as defined in the Act.

Compensation requirements:

• Nonexempt employees:  Must be paid only for hours worked. Paid time off, if offered, is administered per company policy. No compensation is required for hours where work is not performed.
• Exempt employees:  The FLSA requires exempt employees to be paid a guaranteed weekly salary that cannot be reduced based on the quality or quantity of the employee's work during that week. If improper deductions are taken, the exempt status of that employee may be jeopardized.
  
  In the event of sickness and the employer does not provide a bona fide leave plan (paid sick leave or paid time off), an exempt employee who performs any work during a company-specified work week must be paid their salary for the full week. If the company does provide a PTO plan, and it is exhausted, the employer may deduct in full day increments for full days off. 

While there are other nuances in the FLSA, the above should serve as general guidelines.