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What about salary basis test

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  • What about salary basis test

    The OP didn't say explicitly, but mentioned having to use "personal time" to make up for absences during the day to fill out their 9 hours.

    What happens if you don't have any "personal time" to backfill with? Do you get docked (i.e. does your pay depend in any way on how many hours you worked in a given day)?

    The rules on mandatory consuming of vacation/paid time off for less than a day increment are fuzzy (in CA at least.. )

  • #2
    This website discourages having unrelated questions being inserted into threads. What is referred to as "hijacking" the thread. This reduces the original posters chances of having people staying of target for THEIR question.

    Perhaps the moderator can move this to it's own thread?

    The answer is that is we have an Exempt employee whose classification requires the "salary basis" (not all Exempt employees are subject to the salary basis requirement), then the docking rules are 29 CFR 541.602. These rules are the same whether or not there are any PTO balances.
    http://ecfr.gpoaccess.gov/cgi/t/text....1.1.22.7.85.3
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      I'll move it to its own thread.
      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

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      • #4
        is consuming PTO (in small chunks) "docking"

        OOps.. didn't mean to hijack.. The question was whether the mandatory consumption of PTO (or potential docking, once all the PTO was consumed) to "make up the hours" would make the position non-exempt because of the Salary Basis test?

        That is, an employer can require a certain number of hours to be worked (whether exempt or non-exempt). If the exempt employee doesn't work those hours, they still have to be paid for a day's work (or the docking rule comes into effect). So the question is whether the employer can consume PTO to fill in the gap.

        I think there was a decision in CA that (PG&E employer perhaps?) the employer could do it, but in chunks of 4 hours, and that it was a bit vague below that (i.e. DLSE didn't say you could, but didn't say you couldn't).

        So, with regard to the OP on the thread I apparently hijacked, the time spans mentioned were in the 2 hour range, so I wondered if that would have put it in the "docking" territory.

        I realize the Feds don't care about whether PTO is given or not, or what its nominal value is, so maybe it's a except for California situation.. that is, in CA, the PTO is "worth" something, so if it's taken away or used involuntarily, there's some element of costing the employee and getting into trouble with the salary basis test.

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        • #5
          The argument in question, even in CA, applies only in limited situations and it is very much a question for debate whether it applies at all. But even taken in the most generous of interpretations, it would not change an exempt position to non-exempt, but simply require the employer to restore the PTO balance.

          In no other state is there any question. Both exempt and non-exempt employees can have PTO applied to any partial day increment without it affecting the exempt status. The salary basis test applies to the number of dollars in the paycheck at the end of the week, not what bucket those dollars came from. And even in CA this is going to be the answer nine times out of ten. And possibly ten times out of ten.
          Last edited by cbg; 06-25-2011, 08:26 AM.
          The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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          • #6
            The PG&E decision was called Conley. If you want to figure out just what CA-DLSE thinks that decision means, there is a good discusion in the CA-DLSE manual.

            There are really two very unrelated issues here.

            - "Exempt" and "salaried basis" are federal law (FLSA) concepts. Vacation/PTO is not a federal law concept. The federal law concepts are completely unrelated to the federal rules on Exempt Salaried handling. Example. Bob works 1-1-1-1-1-0-0. Under federal law, Bob must be paid his entire salary. Period. CA (or any other state) law has nothing to do with how Bob is paid. The 541.602 docking rules do not mention vacation/PTO and federal DOL is very much on record that nothing to do with vacation/PTO has anything to do with them. Period.

            - Now completely unrelated to anything in federal law, CA has the strongest vacation/PTO rules in the country. These rules discuss the reduction in the vacation/PTO balance. The infamous Conley case (which apparently no one but me actually read) was a function of an Exempt Salary employee of PG&E claiming that because his employer reduced his vacation/PTO balance to cover base hours not worked that the 29 CFR 541.602 regulation and related CA law that this reduction violated the salary basis rules, making Conley non-exempt, and subject to retroactive overtime. Conley never asked for the vacation/PTO back. he instead asked for paid overtime. What everyone seems to miss is:
            - Conley lost his 100% of his case. The court was really clear that he lost all elements of his case.
            - The court was VERY clear that PG&E actions in their entirety were entirely legal.
            - Conley never asked for the vacation/PTO back, and the court never discussed the issue.
            - CA-DLSE in their wisdom seemed to have read a very different decision then the one published on the courts website. CA-DLSE seems to think that the issue was Conley wanted the vacation/PTO balance restored and that the court somehow found for Conley.
            - HOWEVER, the rules are whatever CA-DLSE say they are. The rules were confused prior to Conley and they remain confused after Conley. The Conley decision arguably clarified the small issues while ignoring the big issues. And what you read in the CA-DLSE manual is indeed the current rules no matter how CA-DLSE made the decision. Their ball. Their court. Their rules.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              Yes that was it.. I had read the DLSE manual, but not the case, and as you say, it is sort of confusing, and even more so, apparently, given the difference between the case and what DLSE now says.

              But it strikes me that this is hardly unusual.

              Thanks for clarifying it (such as the clarification can be done)

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