Question: If we are providing a reduced work schedule as an accommodation under the ADA for an exempt salaried person, may we reduce their pay based on hours worked?
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Answer: Thank you for your inquiry regarding reducing an exempt employee’s salary to account for a reduced work schedule provided as an ADA accommodation.
Exempt employees must generally be paid on a salary basis at a predetermined amount each pay period. This pay may not be reduced based on a variation in the quality or quantity of the work performed; however, there are limited exceptions, one of which may apply here.
When leave is taken under the Family and Medical Leave Act, employers may dock the pay of otherwise salaried and exempt employees for absences of less than one full day without affecting their exempt status, but this only applies to situations where the employer is required to provide leave under the FMLA. The ADA does not contain a similar provision or allowance.
However, employers may set up a permanent furlough arrangement/permanent change in an employee’s usual weekly schedule, such as changing the weekly work schedule from 5 days to 4 days, and the employer may alter the employee’s salary to match. As long as the exempt employee still receives at least the minimum weekly salary required by the FLSA (currently $455, though this amount may increase with pending federal changes), then the employee will still remain exempt.
So depending on the nature of the employee’s reduced work schedule as the accommodation, you may be able to make a permanent adjustment to the employee’s salary to match. However, the salary should not fluctuate from week to week based on the actual hours worked.
If the accommodation would require a fluid, irregular schedule, then you may wish to change the employee’s status as non-exempt as part of his or her ADA accommodation. (Note: Changing a single employee’s status, without also changing the status of other similarly situated employees, is typically not permitted. Therefore, it is important that this change be made and documented as part of this employee’s specific accommodation.)