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Statement of Policy

It is the intention of Purdue University to comply with the salary basis requirements of the Fair Labor Standards Act (FLSA), revised effective August 23, 2004, as they apply to public sector organizations. The act prohibits improper deductions from the salaries of exempt employees.  

Reason for Policy

The Fair Labor Standards Act allows employers to dock the pay of exempt staff for certain prescribed reasons. As part of the provision, the employer must have a written policy in place describing the conditions under which pay may be docked.

Who Should Know This Policy

Contacts

Table of Contents

Statement of Policy

Reason for Policy

Who Should Know This Policy

Contacts

Table of Contents

Definitions

Exclusions

Procedures

History

Definitions

Exclusions

This policy does not apply to non-exempt employees.

Procedures

In order to ensure compliance with the FLSA, any department contemplating docking an exempt employee's pay must contact Employment and Compensation before proceeding.

An exempt employee's pay may be docked by executing a payroll change form showing the amount of pay to be docked and the dates for which the employee is to be in unpaid status.

Deductions from pay must relate to time not worked. Employers may not make deductions and expect employees to work without compensation.

Deductions may be made when an exempt employee is absent from work for one day or more when the accrued leave provided by the University (see University Policies C-45 and C-46) is not used by an employee because:

• accrued leave has been exhausted;
• he employee chooses to use leave without pay; or
• permission for leave has not been sought or has been denied. (May be accompanied by disciplinary action.)

Deductions from the pay of exempt employees may be made for:

• suspensions given for violations of safety rules of major significance, which include those relating to the prevention of serious danger in the workplace or to other employees, or
• suspensions given for violations of written Purdue policy or written workplace conduct rules applicable to all employees within the workplace.

During the initial and terminal pay periods of employment, Purdue will pay the proportionate amount of an employee's full monthly salary based on the number of days the employee actually worked in these periods.

For exempt employees taking unpaid leave under the Family and Medical Leave Act (FMLA), the annual rate of pay is used to calculate an hourly rate. Pay is deducted based on the number of hours in unpaid status.

For example, if an employee who normally works 40 hours per week uses two hours of unpaid leave under the FMLA, Purdue deducts two hours worth of pay from the monthly salary.

If an employee believes that an improper deduction has been made from his or her monthly salary, the employee should report this to Employment and Classification by calling (765) 494-7410. Reports of improper deductions will be promptly investigated. If it is determined that an improper deduction has occurred, the employee will be promptly reimbursed.  

Responsibilities

History

This is a new policy.