Re: Part-time exempt employees

Felicia,

In general, you are correct that the salary basis test must be met before
someone can be classified as exempt. However, because there are certain
exceptions to the salary basis test (for example, licensed attorneys do not
have to meet that test), it depends on what the employees are doing as to
whether this situation creates a problem under the FLSA.

My recommendation would be to obtain information about the jobs performed by
these 29 employees so that we can determine whether there is an issue. If
they do not fit within one of the exceptions, we probably should have them
affirmatively report time so that hours worked over 40 can be paid at the
overtime rate. You would use the hourly rate they are paid to determine the
overtime rate. If they are not working over 40 hours in a week, it will not
be an issue.

Let me know if you have questions.

Michelle

Felecia Acevedo@ENRON
04/27/2000 05:40 PM
To: Michelle Cash/HOU/ECT@ECT, Sharon Butcher/Corp/Enron@ENRON
cc: Brian Schaffer/Corp/Enron@ENRON
Subject: Part-time exempt employees

Sharon and Michelle,

We have 29 employees in the payroll system that are part-time exempt
employees and their pay is calculated on an hourly rate. Unless I understand
the FLSA incorrectly we cannot in any way calculate salaries on exempt
employees on an hourly basis. If they are reduced hours we would need to
determine how we would value their job based on a salary basis otherwise we
are treating them as hourly employees and not exempt employees. An exempt
employee should only be tracking exception time (i.e. sick, vacation, etc --
any off duty time) but not work hours during the day. An exempt worker
according the FLSA can only be paid on a fee basis or salary basis -- not on
an hourly basis. If I am off base let me know, otherwise I would like your
help with how we should approach getting this corrected and possibly having
this covered in a policy on how to deal with employees performing exempt jobs
that are working part-time or reduced schedules.

Look forward to hearing back from you.

Felecia