Q3: An employee who has full-time status based on the prior measurement period is reducing hours below 30 hours per week. Determining whether you were constructively dismissed or not would require more facts and would cross the line from legal information to legal advice. Generally, exempt employees must receive a pre-determined, guaranteed salary of at least $455 per week. Communicating with Employees: A reduction in hours and/or … Employers generally have carte blanche when it comes to employing workers, retaining employees and reducing employee hours and pay. Not only are they unsure about the stability of their job over the long run due to the company’s financial issues, but they are also frustrated by the sudden change in their schedule and reduction in pay. The employee is currently in a stability period. Employers can legally move an employee from full-time status to part-time status for any reason, including the company no longer wanting to employ full-time workers. He also has a different schedule, so he will have to figure out different child care, and miss some of his night classes that he is taking to get his degree. Spending too much time on HR, not your business? Learn the Legal Issues Related to Cutting an Employees Pay, List of Federal and State Minimum Wage Rates for 2021. As you are aware, the recent economic downturn has adversely affected Broadway Inc. To increase cash flow and limit layoffs, the company has decided that salary reductions are necessary at this time. Does a new start up business qualify for the PPP Plan? Employers can usually change employees from full time to part time by giving notice or simply altering the employees' schedules to reduce their hours. Your employer doesn’t need a reason to cut your pay or reduce the hours you are scheduled to work. The amount you make and the hours you work aren't guaranteed. A pay cut is a reduction in an employee's salary. The content on this blog is "as is" and carries no warranties. And what else do I have to know before making these changes? But how does on transition an employee from full-time exempt employee to part-time employee? If you’re going to transition an employee from full-time status to part-time and their hours will not extend beyond part-time, then you can decrease their pay. Nondiscrimination laws prohibit discrimination on the basis of age, race, color, sex, national origin, religion, genetic information, disability, and other protected characteristics. Health reimbursement arrangements (HRAs), health savings accounts (HSAs) and health care flexible spending accounts (HFSAs) are generally referred to as account-based plans. The easiest option would be to reduce his hours to four days per week. Check your state law for more information. Even with a pay cut, non-exempt employees—hourly wage earners who make less than $684 per week—are generally guaranteed overtime pay. U.S. Department of Labor. Employers may do this to save money on payroll when revenue is low or there is less of a need for labor due to slow growth or a seasonal drop in demand. Be sure to give employees as much advance notice as possible. The Affordable Care Act (ACA) requires employers with 50 or more full-time and full-time equivalent (FTE) employees to offer health coverage to full-time employees (those who work on average 30 or more hours per week) and their dependents. How can I apply for an EIDL for my small business? A law called the Employment Standards Act, 2000 (ESA) sets minimum standards for things like pay, hours and time off.Most workplaces in Ontario must follow this law and your rights are the same whether you work full-time or part-time. F 859.255.9457 you are not targeting a mature-aged worker) and you consult with the employee before implementing it. Ensure your company is compliant with local standards before making any changes. This creates stress for not only the human resources team responsible for executing the reduction in hours, but also for the employees. Pay cuts are often made to reduce layoffs while saving the company money during a difficult economic period. Check your state law for details. With a few limited exceptions, exempt employees must be paid their full salary each week they perform any work, regardless of the number of hours or days worked. The DOL may see this pattern as a way for the company to avoid paying overtime or classifying employees as exempt, which would allow the employee to work as many hours as needed and be paid for the total hours worked. Also, reducing work hours can be a huge morale killer for your employees. The easiest option would be to reduce his hours to four days per week. If they do agree, in writing, then no problem. "Final Rule: Overtime Update." We appreciate all the hard work you have put into your position at this company, and we do not want to lose you as an invaluable employee. Under the Fair Labor Standards Act (FLSA), employers must pay non-exempt employees at least the minimum wage for each hour worked and overtime when they work more than 40 hours in a workweek. They key here is to find a way to measure it, and then compare productivity levels before, during, and after the reduction in work hours. According to the U.S. Department of Labor, the Fair Labor Standards Act (FLSA) does not define full-time or part-time employment. Streamline onboarding, benefits, payroll, PTO, and much more with Zenefits. genuinely seek input from affected employees about redundancy decisions; integrate decisions made regarding redundancies with more positive elements of organisational change; and. Do you want to eliminate costs over the holidays? Employers may reduce non-exempt employees' hours provided the employee is paid at least the minimum wage per hour and overtime when due. Companies cannot target workers for wage reductions by race, age, or any other protected class under discrimination statutes. If you aren't protected by an employment contract or bargaining agreement, your employer can reduce your salary and your work schedule at any time, with some limitations.. If you reduce the work hours of your employees working this shift, will you have idle windows at your organization that need to be covered? The employer applies the monthly measurement period to this employee through the end of the first full measurement period and administrative period that would have applied had the employee remained under the applicable look-back measurement period. As a recap, part one addressed waiting until things go back to “normal” and not wanting to give more […]. 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