Business and Finance
Conditions Under Which Deductions From the Pay of Exempt Employees May Be Made (II.C.5)
Volume II: Business and Finance
Chapter C: Payroll
Responsible Executive: Senior Vice President for Business Services and Assistant Treasurer
Responsible Office: Human Resources Services
Date Issued: August 23, 2004
Date Last Revised: November 18, 2011
TABLE OF CONTENTS
Statement of Policy
Reason for This Policy
Individuals and Entities Affected by This Policy
Who Should Know This Policy
Web Site Address for This Policy
Related Documents, Forms, and Tools
History and Updates
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.
The Fair Labor Standards Act allows employers to Dock 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.
- Exempt employees
- Associate and Vice Provosts
- Executive Vice President and Treasurer
- Vice Presidents
- Directors/Department Heads/Chairs
- Principal Investigators
- Business Office Staff
- Exempt Administrative and Professional Staff
This policy does not apply to non-exempt employees.
Fort Wayne campus
North Central campus
West Lafayette campus
Reduce, pay less than, or withhold part of an employee?s pay.
Employees who are not subject to the overtime and recordkeeping provisions of the Fair Labor Standards Act.
Communicate this policy to Exempt employees.
Provide policy to Exempt employees; contact Employment and Compensation prior to Docking Pay; inform employee if pay is to be docked.
Prepare Leave Action form paperwork.
Utilize appropriate procedures to Dock Pay of the affected employee.
In order to ensure compliance with the FLSA, any department contemplating Docking Pay of an Exempt employee must contact Compensation before proceeding.
An Exempt employee?s pay may be docked by executing a Leave Action 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 Executive Memorandums C-45 and C-46) is not used by an employee because:
- accrued leave has been exhausted;
- the 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 Compensation. Reports of improper deductions will be promptly investigated. If it is determined that an improper deduction has occurred, the employee will be promptly reimbursed.
- Leave of Absence Policies for Clerical and Service Staff (C-45)
- Leave of Absence Policies for Faculty, Continuing Lecturers, and Administrative and Professional Staff (C-46)
- Leave Action form
November 18, 2011: Policy number changed to II.C.5 (formerly IV.5.7) and website address updated.
September 25, 2009: updated to reflect terminology and process changes resulting from the implementation of OnePurdue.
August 23, 2004: This policy was originally issued in response to changes in the Fair Labor Standards Act.
There are no appendices to this policy.