California Wage And Hour Opinion Affecting Mandatory Furloughs And Wage Deductions
In a surprising decision issued on May 30, 2001, California's Chief Counsel
for the States' Division of Labor Standards Enforcement (DLSE) has interpreted
California's wage and hour law as prohibiting any deduction from the paycheck
of an exempt employee during any month in which that employee has worked,
provided the employee was ready willing and able to do so. The fact that there
is no work available does not provide an exception to the rule.
The opinion refers to the recently enacted AB 60, which received attention
because it reinstated daily overtime in California. The legislation also
amended Labor Code Section 515(a) to provide that to qualify as an exempt
employee in California, an employee must earn "a monthly salary
equivalent to no less than two times the state minimum wage for full-time
employment." While it is likely that this requirement was designed to
avoid exempt status for low-level managers, the DLSE has adopted an extreme
interpretation, by opining that this requires payment of a full, monthly
salary regardless of the number of days worked in any given month as long as
the employee was ready to work.
The opinion also expressly notes that an employer may not make deductions
from an exempt employee's salary for absence during a month in which he or she
works for disciplinary suspensions, jury duty, attendance as a witness in a
court proceeding, military leave, temporary plant shutdowns of less than a
month, work unavailability for less than a month, and disability due to
accidents or illness unless the employer has a plan or practice of providing
full compensation for salary lost due to illness which the employee has
exhausted. The opinion does not preclude wage deductions for partial month
absences due to voluntary absences for personal reasons.
The opinion also expressly closes any end-run attempt to avoid the law by
banning mandatory use of accrued vacation as a means to substitute vacation
pay for days lost due to mandatory furloughs. There is some inconsistency in
...
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