Recovering Losses From EXEMPT Employees


Our recent Quick Quiz Answer on recovering losses from non-exempt employees has caused some to ask whether the same analysis applies to employees who are treated as exempt under the federal Fair Labor Standards Act's executive, administrative, or professional exemption (including the "computer employee" and "highly compensated employee" versions). To answer this question, let's repeat the facts with a few changes:

Store Manager Alex is paid on a salary basis at the rate of $800 per week. He meets all of the duties requirements for the FLSA's "executive" exemption. On Monday, he approves accepting a $150 check in payment for merchandise. He was so busy that he forgot to ensure that the cashier had the necessary customer information, and now the check has been returned because the account is closed. Alex's employer is unable to contact the customer.

A written company policy that is given to all Managers when they are hired requires Alex to pay for the loss that workweek through payroll deduction, in cash, or by personal check. As the policy requires, the District Manager has Alex sign a memo saying that he agrees to make the payment. Alex adds a notation that he prefers to pay in cash. He works exactly 45 hours that workweek. Under the FLSA, how much can the employer recover from Alex that workweek?

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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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