HR Hotline: How Do We Pay Exempt Employees Enrolled in Shared Work If Hours Change?
Q: My company employs several salaried, exempt employees who we’ve enrolled in the Department of Labor’s Shared Work program. We reduced their hours from five to four days per week (a 20% reduction), and also reduced their salaries by 20%, and they receive Shared Work unemployment benefits.
Occasionally, we need those employees to work some additional hours in order to satisfy work deliverables. Since the employees are exempt, may we increase their hours without increasing their pay, without violating program rules?
A: No. When an employer increases the hours of an employee enrolled in the Shared Work program, the employer must pay the employee for those additional hours—even if the employee is exempt—and the employee will receive a proportionately reduced weekly unemployment benefit.
Although typically an exempt employee receives the same weekly salary regardless of the number of hours worked, this does not apply to employees on the Shared Work program.
Employers using this program report their employees’ weekly hours by submitting a certification to the labor department.
The employer may modify an employee’s hours anywhere between 10% to 60% in any given week.
As long as the employer stays within those parameters, the ratio of work hours to non-work hours can fluctuate on a week-to-week basis, although the hours cannot be reduced by more than 60%.
The weekly certification submitted by the employer must accurately and truthfully reflect the number of hours worked and not worked.
If an employer offers increased hours in any given week, the employee must accept and work those hours—and must be paid for the hours by the employer, not DOL.
If work increases to such an extent that the employer asks employees to return to 40 hours or more per week, the employer should not submit a Shared Work Certification for that week.
Companies that submit the same certification each week indicating reduced employee hours—even in weeks with increased work—risk liability for defrauding the labor department, in addition to wage violations against its employees.
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