Disciplinary action for exempt salaried employee

kathy534 · February 2003

Employee was insubordinate, and sent home for a full week without pay. This behavior has been ongoing, and the Manager is hoping this will "hit home", and straighten out the employee. Question is - can we dock the week's pay, yet still give this employee her earned commissions for the week (which is almost equal to, or even greater than the weekly salary amount)? Manager doesn't want ee to suffer a severe financial impact employee. This will mean she will only loose about half her income for the week.

Thanks for all your help in this matter!!

sandra_d · February 2003

If commission is separate from salary, I would expect that commissions would in fact be due to the employee.

Hatchetman · February 2003

If I can offer my non-legal opinion, the issue is whether or not you have to pay the employee's salary for any week in which he or she did not work. That you may dock the entire weekly salary because the employee performed no work at all during the week, is clearly permitted by FLSA 29CFR541.118(a). Thus, a week's suspension may result in docking the salary without jeopardizing the exempt status.

The issue then is whether commissions are viewed as part of the "salary" for this purpose.

From the way I read it, since 541.118(b) provides that a salaried employee may receive additional compensation, such as a commission, which does not form part of the salary (which is the "pre-determined" amount), then the commission that is to be paid for that week could be paid without jeopardizing the exempt status.

Further, it seems to me that DOL doesn't care if you pay all or any part of the exempt employee's salary in the week that NO work was performed. For example, there is an opinion letter that is found on the SHRM website that states that an employer may pay only holiday pay to an exempt employee for Thanksgiving day and not pay the salary for the rest of the week, WITHOUT jeopardizing the exempt status when the exempt employee doesn't work at all during that week.

Thus, as additional compensation in a week in which no work was performed, it would seem that the commission payment would NOT jeopardize the exempt status. from at least two angles.

Your state's laws may also have an impact here. It may require that commissions which are payable through a "contractual" arrangement (such as a manager who gets a salary and a percentage of the sales for the office) or be paid out even if the employee is not at work (such as on leave) but is being paid commission actually earned from a previous week (an outside salesperson).

You should consult legal counsel if you plan to dock the commission because the exempt employee didn't work at all that week if the employee would otherwise be entitled to the commission.

Disciplinary action for exempt salaried employee

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