The economic impact of the worldwide pandemic has hit employers hard. While many employers are faced with immediate employee furloughs or lay offs as their business is all but shut down others are able to keep going with employees working remotely.
Nonetheless, many employers are still faced with reduced revenues and are seeking alternatives to layoffs including reducing pay or hours worked.
Employers can reduce an employee's rate of pay based on business or economic slowdown, provided that this is not done retroactively.
For instance, if you give employees notice that their pay will change on the 10th, and your payroll period runs from the 1st through the 15th, make sure that their next check still reflects the higher rate of pay for the first 9 days of the payroll period.
Non-exempt employees (those eligible for overtime pay)
A non-exempt employee's new rate of pay must still meet the applicable federal, state, or local minimum wage. Employees must be given notice of the change at the time of the change, or before. This gives them the ability to stop working if they don’t agree with the new rate of pay and can help prevent a wage claim.
Non-exempt employees are still covered by California's wage and hour laws, including overtime pay, meal breaks, and rest breaks.
Exempt employees (paid a fixed salary and not eligible for overtime pay)
An exempt employee's new salary must still be at or above the federal or state minimum for exempt employees. The federal minimum salary is $684 per week.
Several states have weekly minimums that are considerably higher than that (including California at $54,080 for employers with 26 or more employees and $49,920 for employers with 25 or fewer employees, and NY at $58,500 annually)
Also, the minimum may not be prorated based on hours worked if a reduced work week is put into place.
See HEREfor more details on 2020 Federal and State minimum wage rates and at https://www.thebalancecareers.com/2018-19-federal-state-minimum-wage-rates-2061043
Artemiste is committed to helping our clients navigate through these ever-changing HR challenges. We will continue to publish updates as they become available and are available to answer any questions during the crisis and beyond.
Discover Our Expertise - Artemisteoffers a wide range of Human Resources services to help your business needs. We understand the challenges employers are facing and will work with you to ensure you have the best guidance and tools available. Contact us today for a complimentary consultation
Aisling Byrne, SHRM-SCP, CEBS, CMS, CPLPis the CHRO and CTLD at Artemistewhere creating great places to work is our passion. Ms. Byrne is a frequent contributor to the Artemiste blog on many topics including onboarding, talent development, performance management, compensation planning, employee engagement, total rewards and learning and development.
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