Can an employer make prospective reduction in pay for a salaried exempt employee due to the economic downturn?
An employer is not prohibited from prospectively reducing the predetermined salary amount to be paid regularly to a Part 541 exempt employee during a business or economic slowdown, provided the change is bona fide and not used as a device to evade the salary basis requirements. Such a predetermined regular salary reduction, not related to the quantity or quality of work performed, will not result in loss of the exemption, as long as the employee still receives on a salary basis at least $684* per week. On the other hand, deductions from predetermined pay occasioned by day-to-day or week- to-week determinations of the operating requirements of the business constitute impermissible deductions from the predetermined salary and would result in loss of the exemption. The difference is that the first instance involves a prospective reduction in the predetermined pay to reflect the long term business needs, rather than a short-term, day-to-day or week-to-week deduction from the fixed salary for absences from scheduled work occasioned by the employer or its business operations.
Learn more from the U.S. Department of Labor
Health Insurance Eligibility Extensions (4/30/2020)
The U.S. Department of Labor, Department of Treasury and Internal Revenue Service issued a joint notice extending certain time frames affecting participants’ rights to healthcare coverage, portability and continuation of group health plan coverage under COBRA, and extends the time for plan participants to file or perfect benefit claims or appeals of denied claims.
- These extensions provide participants and beneficiaries of employee benefit plans additional time to make important health coverage and other decisions affecting their benefits during the coronavirus outbreak.
- EBSA Disaster Relief Notice 2020-01 – This guidance, in part, extends the time for plan officials to furnish certain benefit statements, annual funding notices, and other required disclosures
- EBSA Frequently Asked Questions – This document contains pertinent information regarding the impact of COVID-19 on certain health benefit and retirement benefit issues.
H.R. 6201 - Federal- Families First Coronavirus Response Act - Passed by both Houses & Signed by President Trump
of the Families First Coronavirus Response Act and the Coronavirus Aid,
Relief, and Economic Security Act (CARES Act) on Missouri Cities" (April 2, 2020)
presented by James C. Hetlage and Julie Z. Devine, Lashly & Baer, P.C.
ICMA and Sustainable Strategies DC addressed the resources for local governments and communities in these three federal response packages.
Paid Sick Leave Webinar from National League of Cities (March 27, 2020)