Legal Limits on Pay Docking and Unpaid Suspensions | Mann & Elias
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Legal Limits On Pay Docking And Unpaid Suspensions

Are You Getting Properly Compensated For Your Work?

Some employers dock workers’ salaries or put them on unpaid suspensions to discipline them for violation of workplace rules. According to an employment attorney in Los Angeles, this policy may create problems for the employer if the employee whose pay is being reduced is also exempted from overtime; this applies if the employee isn’t eligible for overtime due to a salary basis pay, and is still subjected to unlawful salary deductions.

How Does Pay Docking to Become a Problem?

To qualify as an exempt, an employee has to be paid an agreed amount of money each period per the contractual terms without deductions based on the quantity or quality of the work they do. Docking an employee’s pay is treating them like non-exempt workers, and the law might put them in that classification. Non-exempt employees are entitled to overtime pay. You should not expect to receive unpaid wages. If so, your rights are being violated. The money you may use paying your employee in overtime will be more than the one you save due to pay docking.

So What Qualifies an Employee to Be Salaried?

Under federal law, employees who aren’t entitled to overtime pay must earn a minimum of 684 U.S dollars every week or 35,568 U.S dollars annually. Contact an attorney to determine what qualifies as the minimum pay in California State if you are unsure. To qualify as an exempt employee, one must be paid on a salary basis. However, this requirement does not apply to teachers, outside sales employees, doctors, some computer employees, and lawyers.

Paying an employee on a salary basis means that they are paid a fixed amount per stipulated pay period regardless of the number of hours they have worked, the quality of their work, or how much they accomplished. As long as some work is done during the week or month, the employee is entitled to a full weekly or monthly salary. Employees may need a lawyer to sue an employer for unpaid wages if subjected to improper deductions.

What Are Lawfully-Permitted Salary Deductions?

Employers are allowed by the law to make salary deductions without jeopardizing the employee’s exempt status for one or more days if an employee takes an off. Below is a list of permitted salary deduction scenarios:

  1. When they go on medical or family unpaid leave under the FMLA- Family, and Medical Leave Act.
  2. When they take off days to take care of some personal issues.
  3. Taking a leave for illness or disability reasons and having a policy such as sick leave or disability insurance will compensate them for the time off.
  4. When they take time off to serve as a court witness, a jury member, or short-term military leave. However, the employer must only deduct the amount the employee is paid as military pay, jury, or witness.
  5. One can deduct employees’ pay if they don’t work a full week during the first or last week of work.
  6. Deductions can be made as a good faith penalty imposed to improve safety and prevent any workplace dangers.
  7. Deductions are permitted if employers have policies that are well-written to allow for unpaid disciplinary suspensions imposed on them in good faith due to violations of workplace rules and conduct. However, these policies should apply to all employees.

What Constitutes Improper Deductions?

An employer can be penalized for practicing improper pay deductions. This is defined as an action or set of activities that clearly show the employer’s intentions of deducting salaried employees’ pay. Below are the factors a government agency and the court will consider when making this decision

  1. How many improper deductions has the employer made?
  2. How many employees experience inappropriate salary deductions, and did they work during that period?
  3. The period during which the improper deductions were made
  4. Has the employer communicated any policies that prohibit or permit improper deductions?

What Is the Penalty for Improper Pay Deductions?

When it’s determined that the employer has a practice of continually making improper deductions, they will lose the overtime exemption status for the employees who were subjected to the deductions. They must, therefore, pay overtime to every employee subjected to improper deductions if they worked during this period.

Conducting improper employee pay deductions can land employers in trouble. Employees should contact overtime dispute lawyers in Los Angeles for help if they suspect their employers are subjecting them to improper pay deductions.

Employer Safe Harbor Safeguards

Employers will not be penalized for salary deductions if either of the two is correct:

  1. If the improper deduction cases were inadvertent or isolated and employers reimbursed the employees of any improperly withheld pay.
  2. If there are clear policies that are well communicated prohibiting improper pay deductions, plus a well-stated complaint procedure, reimbursement of money that was wrongly withheld and making an effort in good faith to obey the law in the future.

What to Do If You Are Subjected to Improper Pay Docks

As an employee, if you suspect that you’re subjected to improper pay deductions, you may need a lawyer to sue an employer for unpaid wages and file a complaint on your behalf. Don’t delay filing a claim with your state agency. There are strict deadlines in which outstanding wage charges should be filed. Don’t wait to file a complaint when the deadline is close.

Although many states such as California will follow the federal laws on the unpaid suspensions, employers should reach out to a workplace lawyer to determine compliance. Employees should pursue legal help with any overtime disputes and salary deductions. National and California state wages and hour laws determine whether employee suspension must be paid in L.A.; thus, employers have to legally discuss their case with legal professionals to help them classify employees as non-exempt or exempt.


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