Wages for Furloughed Employees

As the government shutdown winds on, many government contractors and clients have faced stop work orders from the government. Contractors have in turn furloughed their own idle employees. While this is a reasonable and necessary response to the shutdown, contractors must be careful to act in compliance with Fair Labor Standards Act, 29 U.S.C. 201, et seq. (“FLSA”), lest they inadvertently add to their costs or put their employees’ exempt status at risk.

Under the FLSA, employees are divided into two categories. They are either classified as exempt from some or all of the provisions of the FLSA, or they are non-exempt, that is, subject to all of the provisions of the FLSA. The classification of a position depends upon a number of factors including the type of work the employee is performing, how he or she is paid, and how much he or she earns per week. Non-exempt employees are subject to FLSA’s minimum wage and overtime provisions, while exempt employees are not. To be exempt, an employee must be paid on a salary basis, paid for the job he or she performs, not the hours worked. By contrast, “non-exempt” employees are typically on an hourly basis, and they must be paid for each hour they are “suffered or permitted” to work.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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