Benefits and Compensation

Out of PTO, Can’t Deduct, What Can You Do?

Here’s how to approach the situation:

  • First, if it is important for the employees to be in the office during consistent work hours, make sure that is explained in a written policy. If the policy does not yet exist, create it if this is critical to your business. Make it part of the employee handbook that must be acknowledged. Once a policy exists, enforce it consistently for all employees, using the disciplinary measures already in place with your disciplinary policy.
  • Next, consistently enforce the PTO rules for all employees. If PTO must be taken for miscellaneous work time missed, such as when an employee must show up late for any reason, then it should always be enforced. Don’t fall into the trap of only enforcing it for the employees who request the time in advance; put a mechanism in place to ensure that PTO is deducted when it needs to be, even if it wasn’t previously requested. Alternatively, if PTO is not required to be taken in this case, don’t make the mistake of “punishing” one employee by deducting PTO for times it should not be required.
  • Be sure that employees understand what other leave types are available to them. Don’t find yourself in a situation, for example, where an employee qualified for FMLA leave but never requested it because he or she was unaware of options. It’s equally important to be sure to train supervisors to know what to look for—employees don’t always say “I need to take an FMLA leave of absence” or “I need a reasonable accommodation for my disability.”

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  • Be sure employees understand the consequences for absences beyond what the PTO policy (and other leave policies) grant. If the employee has exhausted all applicable leave options, it may mean he or she is subject to disciplinary measures, even up to termination when warranted. It might seem counterintuitive to think that it is acceptable to discipline and even terminate an employee for hours missed, even though it’s not permissible to deduct that same exempt employee’s wages. But this is the reality in many cases.
  • Last but not least, some employers consider relaxing their policies instead. As a counterpoint to the options outlined above, another tactic would be to be more relaxed on situations in which salaried employees need flexibility in the specific hours they work, such as the ability to come in late on occasion or to leave for an appointment without utilizing PTO. The employers opt instead to focus on performance. There are a lot of benefits to this approach: it’s easier to enforce, employees are often happier, and the administration is simpler. The downside, of course, is the propensity for abuse and frustrations among employees who do not abuse the system; these negatives are what the actions above are trying to combat. And there is still a need for consistency in how employees are treated. It can be a tough balance, but many employers find that a more relaxed approach serves them well. Look at the big picture before making your decision.

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Wage & Hour Compliance: Practical Solutions for HR features:

  • Real-world examples of wage and hour challenges and how to solve them;
  • Multiple quizzes, so you can see where you need to review more carefully;
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  • State-specific charts, for comparing your multistate obligations;
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  • A quarterly newsletter, Wage & Hour Compliance Bulletin, to keep you aware of the latest developments in the law and why they matter to you.

Why are aggressive attorneys so eager to file claims on behalf of employees? Because there’s so much money to be made! Some examples are:

  • $4.75 million: Hospital in Thousand Oaks, California, settles wage and hour lawsuit over miscalculated overtime pay and failing to compensate workers for missed meal and rest periods.
  • $1.15 million: Las Vegas construction company to pay back wages to 1,060 current and former employees.
  • $976,327: New Mexico aerospace company settles with 900 employees who were routinely required to work through lunch breaks without compensation.
  • $340,400: New Jersey convenience store agrees to pay back wages and damages for violations of overtime and recordkeeping.
  • $84,541: New York physical therapist agrees to pay 22 employees for minimum wage violations.
  • $30,000: Texas chain of four gas stations agrees to pay their six hourly employees, again, for recordkeeping and overtime violations.

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