Benefits and Compensation, Coronavirus (COVID-19)

Take Care Implementing Pay, Work Reductions During COVID-19 Slowdown

Q. Because of the coronavirus, we have reduced everyone’s hours to 30 per week. An employee wants to take his paid time off (PTO) but be paid for his normal 40-hour workweek. Can the company pay for only 30 hours since that is what the entire staff has been moved to?

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A. It depends. You must treat exempt and nonexempt employees differently. With respect to nonexempt (typically hourly) employees, you may reduce their hours based on available work. Continue to have them accurately track their hours worked and pay each employee based on hours worked.

If you asked your hourly employee to reduce his hours worked to 30 hours per week and he worked over that amount, you must pay him for all hours worked but may discipline him for failure to follow the hours-reduction directive. You aren’t required to permit an hourly employee to use PTO to supplement the reduced hours.

With respect to exempt (salaried) employees, you cannot reduce their compensation based on hours worked. Doing so could result in the loss of the overtime exemption. In your question, you say you reduced everyone’s hours to 30. If that is the case, exempt employees still must be paid their full salaries for the week.

Going forward, the better practice for salaried exempt employees is to either furlough them for a full week at a time or prospectively reduce their salaries for the time being. I

f you choose to furlough them, you must make sure they do absolutely no work for you during the workweek in which the furlough is implemented. This means they cannot check e-mails or take calls. Any work would result in the requirement that they be paid for the week. If you choose the salary reduction option, take care to ensure it doesn’t drop below $684 per week.

Take a deep breath and hang in there. We’ll get through this together.

Jodi R. Bohr, an attorney with Tiffany & Bosco, P.A., practices employment and labor law, with an emphasis in HR management counseling, litigation, class actions, and other HR matters She is a frequent speaker on a wide range of employment law topics. She may be reached at jrb@tblaw.com.