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In an effort to reduce costs, many employers are considering furloughs – unpaid leave – for exempt employees. However, furloughs can be a legal minefield, if not handled properly, according to the SHRM, the Society of Human Resource Management.

According to the U.S. Department of Labor regulations issued in 2007, an exempt salaried employee is entitled to his or her full salary in any week in which the employee does any work at all – regardless of the number of hours that the employee works.

Under the federal FairPay regulations , an exempt employee who works for 10 minutes during the week is entitled to the same salary as if he or she worked 100 hours during the week.

Also under the FairPay regulations, if an exempt employee is ready, willing and able to work on a particular day, but no work is available, the employer must pay the worker for that day. For example, if the business in Kentucky is closed by a massive power outage, exempt employees must still be paid for that day. Hourly or non-exempt salaried employees need not be paid, under the FLSA or Fair Labor Standards Act.

This means that an employer cannot furlough an exempt employee (more…)

One of the hottest HR topics right now is salary reductions for exempt employees. Many employers are faced with a choice of laying off employees, or using other tactics to reduce payroll.

When employers reduce exempt employees’ salaries, they must take certain precautions to avoid breaking the law.

One option to reduce payroll is to reduce hours for hourly employees. By having every hourly employee work 36 hours per week rather than 40 hours per week, an employer can reduce his or her payroll expenses by 10%. (In many cases, however, the cost of benefits remains constant.)

However, that solution won’t work for salaried exempt employees. Under the federal Fair Labor Standards Act Fair Labor Standards Act, or FLSA, employers must pay an exempt employee his or her full weekly wage, regardless of how many or how few hours the employee works per week. If the exempt employee works 60 hours per week, he or she is not entitled to overtime. However, if the exempt employee works 20 or 30 hours per week, he or she must still be paid the full weekly salary.

This raises a question for employers. Is there any legal way to reduce an exempt employee’s salary?  (more…)

The Connecticut minimum wage will increase by 35 cents from $7.65 to $8.00 per hour on January 1, 2009.

The Connecticut minimum wage increase is statutory, meaning it was voted as part of state laws, rather than being a cost-of-living increase. A number of states, including Florida, Vermont, Washington and Oregon increase the minimum wage each year to adjust for inflation. Connecticut does not.

The state minimum wage is being increased by statute in New Mexico, as well as Connecticut. In New Mexico, the minimum wage will go from $6.50 to $7.50 per hour on January 1, 2009.

The Connecticut minimum wage will increase again, from $8.00 to $8.25 per hour, on January 1, 2010.

A little-known provision of Connecticut law permits (more…)

With the current economic crisis, many employers are considering giving workers additional unpaid time off during the holidays. This includes giving workers Friday, November 28 (the day after Thanksgiving) and/or Friday, December 26 (the day after Christmas) off without pay.

Other employers are considering closing for an entire week between Christmas and New Years.

However, these tactics raise issues around the payment of exempt salaried employees that every employer needs to be aware of. (more…)