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Pay PTO at different rate? Louisiana

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  • Pay PTO at different rate? Louisiana

    Here's the situation. I'm an employed healthcare provider -- exempt by any standard. As a benefit, the company I work for provides for PTO accrual, 20 days per year in my case.

    They are proposing an admendment to my contract. It will extend my guaranteed salary for the next 6 months -- the same salary I have received for the past 2 years. The big change they are foisting on me is that, instead of paying me my regular salary for PTO, they are going to pay me at the 25th percentile for my specialty (I currently make just over the 50th percentile). They said it is a cost-saving measure that they are putting into all the provider contracts as they come up for renewal.

    For holidays, such as July 4, we have to use PTO. My clinic is closed that day. I do not even have the option of working. Yet, I am to be paid less than my usual rate of pay. That seems to fly in the face of FLSA, especially considering I will be working the rest of that week (and the rest of the week of Labor Day, Thanksgiving, etc).

    In addition, the 25th percentile pay rate for PTO is not an across the board change. Administration employees (also exempt) are not having their pay rate changed when they take time off.

    I understand that there are no federal or state laws that require vacation or paid time off. But is it legal to pay PTO at a lower rate than what the employee normally earns? Or would it be legal if I took an entire week off? FLSA states I have to be paid my usual salary if I work at all during any given week, and that deductions can't be taken if the business is closed at the will of the company for a holiday. It is legal for them to take the time from my PTO bank, but to pay less for that time than usual??

    Also, they are effectively creating 2 classes of exempt employees -- one class that earns their regular rate of pay while on PTO, and another that earns less. I know it is legal to offer different benefit plans to exempt vs non-exempt employees, but to offer different plans to exempt employees because one is a provider and the other is an administrator?

    Doing the math, the 20 days I accrue annually actually equal only 14 days at the "new" rate of pay. The monetary difference is $4488 yearly. The only way to avoid that is to not take vacation time. Some days aren't avoidable, though, because the clinic is closed by the company (NY day, Good Friday, Memorial, July 4, Labor, T'giving, Christmas).

    Any ideas, opinions, thoughts on this?


  • #2
    I am thinking that based on what you have said:
    - The feds do not care. They generally do not care about vacation/PTO in the first place, and as long as the class of employee does not violate any actual laws such as Title VII, they would not care about the creation of employee classes as you describe.
    - In theory your state could care. Your state is not my state, so I do not really know for sure what (if anything) LA thinks on this. My best guess is that LA does not care either. Most states would not.
    - The one maybe exception is that presumably have an existing vacation/PTO balance. Under the old common law rules, an argument could be made that it needs to be valued at the original earned rate. Some states agree with this and some do not. I again have no idea what LA thinks. And some judges have their own opinion irregardless of what the state thinks. Especially if the state does not really have an opinion, many judges at that point feel free to use their own opinion.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)


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