I work for a small company in PA that uses a hybrid of salaried and hourly practices that I have never come into contact with before. We are salaried if the job needs to get done (meaning there's no OT), which, from my understanding, is perfectly legal since we are all considered admin or exec employees. However, our hours are also kept track of. We have a PTO system where almost all of it is accrued over a year with a formula of 3.1 hours given back for every 80 hours worked. Whatever time we need to take off for a doc appt or because we are sick, etc, is subtracted from this 80 using our timesheets, and the time off accrued is calculated from the lesser amount. It has always been my understanding (and my experience in other salaried jobs) that one of the benefits of being salaried was that if you needed to take time off for personal reasons it was perfectly fine because you'd be making it up later when the time came to stay late and get the job done. Is my boss simply creating a hybrid system by taking the parts of hourly and salaried that only benefit him/her? Is this legal? Is my understanding of hourly vs salaried flawed? Thank you for your help.

There is a federal law called FLSA. This law defines things such as payment methods (hourly, salaried, commission, piece work, other) and whether or not the employee is Exempt from either minimum wage or overtime laws. The Exempt status is normally the big deal, not the payment method. You are talking like you are Exempt under the Administrative or Executive exceptions. The salaried payment method is a result to the exception, not the cause. The salaried payment method never by itself says anything about whether or not an employee is Exempt from overtime. It is perfectly common and legal to pay Non-Exempt employees on a salaried basis.

You also mentioned Paid Time Off in the broad sense of the word. This mostly is not a function of FLSA. As far as FLSA is concerned, vacation/PTO is something that federal law has no interest in what-so-ever. Sick pay is mentioned in the 29 CFR 541.602 regulation, but only to the extent that sick pay handling effects the docking rules. Paid Time Off handling is a function of company policy and sometimes state law, but not federal law and certainly not FLSA.

There is nothing you mentioned that violates federal law. PA is not my state but it is very unlikely that anything you said violates their laws either. FLSA controls how employees are paid. Not paying an Exempt Salaried employee 1 hour by reducing their actual salary is generally a FLSA violation. Reducing some PTO balance by 1 hour is not a FLSA violation because federal law does not care about such things.

Thank you! That clears up a lot for me. :)