Exempt employee missed work: Is he now eligible for OT?
Q. This year, we hired an exempt employee and offered him a salary of $36,000. However, he took a week off from work without pay, which will lower his annual salary to below the new threshold required for exemption by the Department of Labor. Does this mean the worker is now eligible for overtime pay?
A. Because exempt employees don’t have to be paid for any week in which they did no work, it’s acceptable to make deductions from their pay in this situation without them losing their exempt status, according to a presentation at the 2020 American Payroll Association (APA) Virtual Congress Xstream. Plus, in most cases, the salary basis test evaluates workers’ pay on a weekly basis or on a pay-period basis. An employee’s annual salary only comes into play if they’re consistently paid less than a certain amount each week.