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Under what circumstances can an exempt employee's salary be reduced?

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  • Under what circumstances can an exempt employee's salary be reduced?

    Hi,

    My sister is a property manager for a large company in NYC. For the past year and a half she has managed 4 properties.

    Recently, she was relieved of her duties at one property. The board manager said she "wanted a man" to run the property.

    My sister's boss has now reduced her salary because she is no longer working "full time". But even now, my sister works a very full day.

    I just want to know, is any of this illegal? Can my sister claim discrimination? Can her employer reduce her salary like this? If he can, can a discrimination charge be brought against him given that the salary and work reduction came as a result of possible "sex discrimination"?

    If they reduce her pay, wouldn't that mean that the company never considered her exempt in the first place and should receive overtime pay for any hours above 40?

    If you need more details to round this out, please tell me and I'll be happy to reply.

    Thank you for your time.

  • #2
    Well, the first thing that jumped out at me in your post was that she was told they "wanted a man" for the position. On its face, without any further detail, sounds like gender discrimination to me, which is illegal. Have they hired a man?

    Short of a enforceable employment contract guaranteeing a specific amount, as long as she received notice of the decrease before she worked the hours at the lower rate, and she is still making at least $506.25 per week, then the reduction would be legal.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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    • #3
      If they reduce her pay, wouldn't that mean that the company never considered her exempt in the first place and should receive overtime pay for any hours above 40?

      No, a pay reduction has nothing to do with exempt/non-exempt status.
      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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      • #4
        I, too, am a little alarmed by the comment about the employer wanting a man to do the job at one site.

        However, moving on from that, the employer has reduced the duties of the employee and is not required to maintain her salary at what it was before. (employer could lower the salary without a reduction in duties, too)

        She could still conceivably meet the criteria to be exempt, even with a reduction in pay. In that case, she can be required to work as many hours as the employer deems necessary and not be entitled to overtime.

        If she loses her exempt status, say, because she pay falls below the minimum threshold for exempts, does not entitle her to overtime for the period that she was properly classified as exempt.

        FWIW, the employer can increase or lower an employee's pay at any time for most any reason (except for those that would be illegal discrimination -- you may want to follow up on that aspect with an attorney).

        Originally posted by Pattymd View Post
        [if] she is still making at least $506.25 per week, then the reduction would be legal.
        Patty, New York has a higher salary requirement for exempts? I looked and looked, but can't find anything about exempt employees in New York.
        Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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        • #5
          Yep, ScottB, that's the minimum for New York. I found it in The Payroll Source; didn't even check the NY DOL site.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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          • #6
            Thanks

            Pattymd and ScottB,

            Thanks for your replies. To Pattymd, "Yes" they did hire a man.

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            • #7
              Sorry cbg

              Thanks to you too.

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