HR Quick Take: Reduced Hour Pay

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Q: An employee wants to go to a reduced schedule of 32-hours a week. The position is exempt, 40 hours. Can we simply reduce her pay by the same percentage of reduced hours?

A: The question is whether a salaried employee can have their pay reduced when it is anticipated they will have a permanent hours reduction. To do something of this type on a temporary basis could easily impact the FLSA salary paid basis and create problems with utilizing the exemption to the FLSA. However, a long-term change in the employee’s job, number of hours, responsibilities, or similar issues would be a good foundation for a change in pay reflecting the new status. This could essentially be an hour-for-hour reduction so long as this is a long-term reduction, and you are not simply deducting from pay for a couple of missed hours here and there.

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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