The federal government is in another shutdown.  Obviously, there are many thorny political issues behind the shutdown.  But, there are also practical and legal issues that arise for employers.  In particular, government contractors have employees that want to work and be paid.  One particularly difficult area involves payment of employees who are exempt from overtime.  Contractors need to make sure that they do not accidentally lose the exemption for employees who only work part of a week because of the government shutdown.

In order to be exempt from overtime, executive, administrative and professional employees must paid on a “salary basis.”   To be paid on a “salary basis,” an employee must receive in each pay period a predetermined amount that constitutes all or part of their compensation, and that compensation cannot be reduced because of variations in quality or quantity of work. In other words, you must pay an exempt employee their full salary for any week in which they perform any work regardless of the number of days or hours they actually work.

So, what if you have an exempt employee who is required to report to their government facility today, only to be told that they are non-essential and must return home.  Do you have to pay that employee a full week’s salary, even though they reported to work for an extremely short period of time?  In short:  “Yes.”

But, what about next week?  If the shutdown continues, and the exempt employee performs no work at all next week, are your required to pay them their full salary?  In short:  “No.”  The Fair Labor Standards Act’s implementing regulations provide: “Exempt employees need not be paid for any workweek in which they perform no work.”  Here, it is crucial that employees perform no work at all.  In this electronic age, there is an argument that checking work e-mail can constitute “work.”  Therefore, if government contractors want to ensure that they are not responsible for salary during the government shutdown, they should explicitly instruct exempt employees not to check e-mail or conduct any work-related activities during the shutdown.

Some of my clients believe there are exceptions for partial-week “furloughs” of employees.  In the vast majority of cases you cannot “furlough” an exempt employee without risking loss of the exemption.  If you want to require exempt employees to work for a partial-week, and only pay the for the partial week, you should consult with your employment attorney.