Can I permanently reduce the salary of an exempt employee based on poor attendance?

Under Federal law changing an employee’s pay based on attendance can change the employee’s exempt status and place that employee into non-exempt status and apply a totally different set of regulations. The way state laws are applied may be affected as well.

Exempt status requires “same pay every week regardless of quantity or quality of work”. Changing pay based on attendance can appear to be an attempt to work around Federal overtime law if a case went to court. Even paying bonuses for extra work can have the same appearance in court.

The only legal recourse for poor attendance by an exempt employee is discipline or termination. State laws can have some effect on the termination action. ADA regulations sometimes consider unpaid time off as reasonable accommodation for disabled workers.

Hope that helps you out. =)

A note about HR laws:
Laws concerning employee treatment, benefits, hiring and firing…etc are multi-level. What this means is that there are Federal laws, state laws and sometimes local regulations that have jurisdiction over an employee. The information presented here should not be considered legal advice. Ultimately, employers with serious legal questions should consult local attorneys with expertise in worker relations.
The questions and answers presented here are based on research and data from internet sources and should not be considered the final word.

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