Extracted from a recent message by Dan Pyne, of Hopkins and Carly, a San Jose based law firm, “Beware of the Payroll Implications of Temporary Shutdowns During Holidays.”
In general, employers are obligated to pay exempt employees their full salary during any week in which the exempt employee performs any services. If an exempt employee does not work on a given day for personal reasons (such as vacation, for example), the employer is typically relieved of its obligation to pay the salary on that day. If an exempt employee does not work because the company does not have work for him or her, or because the company elects to shut down its operations on that day, however, the employer is not excused from paying the employee’s salary on such days if the employee performed any work during the week. In short, companies may avoid paying exempt employees for an entire work week only during work weeks in which the employee performs no work, and may withhold salary for an individual day only if the employee does not work for personal reasons. Shutdowns lasting less than a full work week do not excuse employers from paying the salaries of their exempt employees on the days in question if the employees performed work on other days during the week.
Dan can be reached at (408) 286-9800, dpyne@hopkinscarley.com
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