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NH Salary Exempt Deductions - New Hampshire

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  • NH Salary Exempt Deductions - New Hampshire

    What do you do in the situation where:

    1. Employee is Exempt Salary
    2. Paid Bi-weekly
    3. Has exhausted all Paid Time Off (PTO)
    4. Was out the whole first week of the pay period (due to sickness)
    5. Only worked a half day on the second week of the pay period (out due to sickness)

    From my understanding, PTO qualifies as a bona fide sick leave plan and pay of a salary exempt employee can be reduced for full-day absences if PTO is exhausted, correct?

    How about partial day absences where PTO is exhausted, do you pay only the hours worked or do you need to pay for the entire day regardless if PTO was exhausted.

    According to NH 275:43-b - Payment of Salaried Employees:
    I. A salaried employee shall receive full salary for any pay period in which such employee performs any work without regard to the number of days or hours worked;

    However, Federal says:
    Deductions may also be made for absences of one or more full days occasioned by sickness or disability if the deductions are made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness or disability. Thus, if the employer’s particular plan, policy or practice provides compensation for such absences, deductions for absences of one or more full days because of sickness or disability may be made before an employee has qualified under such plan, policy or practice and after the employee has exhausted the leave allowance thereunder. See 29 C.F.R. §541.602(b)(2).

    I emailed NH DOL and I received this response, but they said they could not comment on Fed regulations:
    Once the PTO is exhausted and no time is left, the employee is still required to be paid full salary. Salaried employees are to be paid for the entire pay period that any work is performed. If the employee worked only ½ day in the entire pay period then the employee is required to be paid the full salary for that pay period. Pro-rating of the wage is not allowed.

  • #2
    NH state law has some provisions that do not exist anywhere else in the US. It is possible for a deduction to be legal under Federal law but illegal under NH state law.

    When Federal and state law differ, you have to go by the more advantageous of the two. So your salaried exempt employee would have to be paid his entire bi-weekly salary if he worked any part of the pay period. If he is out of PTO, that's too bad but you can't dock him for it, EVEN IF you could do so under Federal law. State law says you can't.
    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.

    Comment


    • #3
      agree with cbg that the employee would need to be paid for the whole pay period since he worked that 1/2 day. I honestly didn't realize there was a state that was this generous, but based on what you have posted, NH is.

      And yes, the employee gets the benefit of the most generous law, which in this case is NH. Doesn't really matter what federal is since NH is better to the employee than federal.

      The employer could however require the employee to work extra to make up the loss to them. Or they could subtract it from a future PTO accrual if that is their policy for all exempt who miss work for any reason (so as to not run afoul of FMLA). But I am not sure I would want to be the employer who did so.

      Comment


      • #4
        Thanks for the input, here is the full NH law:

        275:43-b Payment of Salaried Employees. –
        I. A salaried employee shall receive full salary for any pay period in which such employee performs any work without regard to the number of days or hours worked; provided, however, a salaried employee may not be paid a full salary in each of the following instances:
        (a) Any pay period in which such employee performs no work.
        (b) When an employee receives a disciplinary suspension without pay in accordance with the Fair Labor Standards Act, as amended, for any portion of a pay period, and written notification is given to the employee, at least one pay period in advance, in accordance with a written progressive disciplinary policy, plan or practice and the suspension is in full day increments.
        (c) If an unpaid leave of absence for a salaried employee is allowed pursuant to a written bona fide plan, policy or practice for absences, of a full day or more, of an employee caused by bereavement leave.
        (d) Any portion of a work day or pay period for leave taken under, and in accordance with, the federal Family and Medical Leave Act of 1993, as amended, if written notification from the employer stating the reason for such leave is given to the employee and placed in the employee's personnel file.
        (e) If the salaried employee voluntarily, without coercion or pressure, requests time off without pay for any portion of a pay period, after the employee has exhausted any leave time pursuant to a written bona fide leave plan, practice or policy and such leave time requested by the employee is granted by the employer.

        II. Employers may prorate salary to a daily basis when a salaried employee is hired after the beginning of a pay period, terminates of his own accord before the end of a pay period, or is terminated for cause by the employer.
        III. The employer may offset any amounts received by a salaried employee for jury duty or witness fees or military pay for a particular pay period, against the salary due for that pay period pursuant to a written bona fide leave plan, practice or policy

        So you all think that this state law trumps any federal laws pertaining to wage deductions?

        Comment


        • #5
          It sounds like e is your out here.

          (e) If the salaried employee voluntarily, without coercion or pressure, requests time off without pay for any portion of a pay period, after the employee has exhausted any leave time pursuant to a written bona fide leave plan, practice or policy and such leave time requested by the employee is granted by the employer.

          I would still pay the full day for the half day worked. Also, if this guy missed essentially 2 weeks, I would be looking to see if FMLA applies. If he just had a nasty stomach bug, it would not but 2 weeks out would tend toward FMLA more often than not.
          I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

          Comment


          • #6
            Hmm, looks like there have been some amendments to the state law since last I looked at it. It used to be even more generous than this, and I was remembering the old rules. But even so, the best out I can find for you is the possibility of FMLA. I am reading (e) that the employee has to request *unpaid time*, which I doubt is the case here.
            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.

            Comment


            • #7
              Originally posted by cbg View Post
              Hmm, looks like there have been some amendments to the state law since last I looked at it. It used to be even more generous than this, and I was remembering the old rules. But even so, the best out I can find for you is the possibility of FMLA. I am reading (e) that the employee has to request *unpaid time*, which I doubt is the case here.
              Received this from NH DOL regarding the "unpaid time":

              Once PTO is exhausted, the employee is still required to be paid; there can be no deductions taken from the salary unless the employee voluntarily agrees to have pay deducted. The key here is “voluntary and without coercion” from the employer. The employee must truly volunteer to have wages deducted.

              Comment


              • #8
                As I said, there are laws in NH which do not exist anywhere else. This is one of them. At least they have done away with the wording that would require you to pay all salaried (not just exempt, but salaried non-exempt also) for a full pay period if they quit in the middle of a pay period.

                Barring FMLA, I think you are stuck with paying him unless he volunteers to go unpaid.
                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.

                Comment


                • #9
                  Originally posted by cbg View Post
                  As I said, there are laws in NH which do not exist anywhere else. This is one of them. At least they have done away with the wording that would require you to pay all salaried (not just exempt, but salaried non-exempt also) for a full pay period if they quit in the middle of a pay period.

                  Barring FMLA, I think you are stuck with paying him unless he volunteers to go unpaid.
                  Yeah, it was very interesting to find that out. All the resources I had read stated that you could do salary deductions based on certain criteria and now this NH DOL law basically trumps the whole thing. I didn't realize NH was so different and favors the employee so much.

                  Comment


                  • #10
                    Future Reference for anyone in this similar situation:

                    "But if an employee has exhausted available earned time off, a New Hampshire employer may only pro-rate a salary if the employee “voluntarily and without coercion” requests a day off without pay (and this is never permissible if the employee requests a day off for sickness)."

                    Source: http://www.devinemillimet.com/upload...t%20052711.pdf

                    Comment

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