What do you do when your exempt employee is disabled and needs a part-time work schedule?
Exempt employees are exempt from the overtime rules, meaning they receive a set salary and aren’t entitled to overtime regardless of the number of hours they work. But what if your exempt employee is disabled and can only work 4 hours a day? If you simply reduce the employee’s salary in proportion to the number of hours worked, you could risk losing the exempt status and subject yourself to wage and hour claims, discrimination, and leave interference.
Under the Fair Labor Standards Act (FLSA), only the deductions listed in 29 CFR 541.602(b) may be made from an exempt employee’s salary. As relevant here, deductions for partial day absences are not permitted unless the employee is taking unpaid intermittent leave under the Family and Medical Leave Act (FMLA).
So, if your exempt employee is FMLA eligible, be sure to designate their time not worked as FMLA leave. Then you can pay the employee proportionately to the number of hours actually worked each week.
A problem arises when the employee has exhausted their FMLA leave or is not FMLA-eligible, and the modified schedule is a reasonable accommodation under the Americans with Disabilities Act (ADA). Unpaid leave as a reasonable accommodation under the ADA is not listed as a permissible deduction in 29 CFR 541.602(b).
Under the ADA, reasonable accommodations may include, among other options, job restructuring, part-time work, and modified work schedules. However, this does not require maintaining an employee's exact job status, benefits, or compensation if their physical restrictions prevent them from fulfilling their original work schedule.
As such, if your employee cannot work their original full-time work schedule, generally, you may temporarily modify the employee’s classification from exempt to non-exempt to align with the reduced part-time schedule. This is not inherently discriminatory under the ADA, provided:
- You have engaged in the interactive process;
- There is no open position for which the employee is qualified that would allow them to work full-time and/or earn more than working part-time in their original position;
- The part-time schedule is a reasonable accommodation in this instance;
- The change to non-exempt is to track and pay for actual hours worked rather than a punitive or retaliatory measure;
- The employee’s salary is proportionally converted to an hourly rate and not further reduced; and
- Reclassifying the employee is consistent with your past practices.
If an employer unilaterally reclassifies an employee without engaging in the interactive process, does so to penalize the employee for requesting the accommodation, or has previously allowed exempt employees to remain classified as exempt despite a part-time work schedule, the employer is at an increased risk of a disability discrimination claim.
Reach out to your FrankAdvice HR Consultant as needed.