Tuesday, October 23, 2018

Hey Fletch … For exempt workers, is it required that they receive a regular salary payment, independent of the number of hours they work? If they work under 40 hours, we currently pay however many hours they work. We don’t pay overtime if they work over 40 in a week since they’re exempt. I thought that an exempt worker would receive a regular, set payment. Can we pay them a varying amount depending on how many hours they work?

DRF—For questions like yours, I like to go to the source. Concerning the salary aspect of exemption, the U.S. Department of Labor says  “To qualify for exemption, employees generally must be paid at not less than $455 per week on a salary basis.” 

The DOL continues, “The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work … an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked.” 

There is the answer to your question. Exempt workers are paid a fixed salary. They are not paid on the number of hours that they work, whether that be above or below forty hours a week.

I like the way that one article put it: “Whether an employee is paid on a salary basis is not affected by whether pay is expressed in hourly terms, as this is a fairly common requirement of many payroll computer programs …” 

If your church has reduced an exempt employee’s salary based on hours worked, you could be in hot water. The church should follow the DOL requirements to “reimburse employees for any improper deductions.” Your church is in jeopardy and should immediately seek professional counsel. 

This is a serious salary issue. Your church is at risk for losing its exemption status for a period of time.