U.S. Department of Labor 

Wage and Hour Division 

 November 2009 

Fact Sheet #70: Frequently Asked Questions Regarding Furloughs 

and Other Reductions in Pay and Hours Worked Issues 

The Department of Labor’s (DOL) Wage and Hour Division (WHD) is responsible for administering 

and enforcing some of our nation’s most comprehensive labor laws, including the minimum wage, 

overtime, recordkeeping, and youth employment provisions of the Fair Labor Standards Act

(FLSA). 

The following information is intended to answer some of the most frequently asked questions that 

have arisen when private and public employers require employees to take furloughs and to take other 

reductions in pay and / or hours worked as businesses and State and local governments adjust to 

economic challenges. 

1. If an employer is having trouble meeting payroll, do they need to pay non-exempt 

employees on the regular payday? 

In general, an employer must pay covered non-exempt employees the full minimum wage and any 

statutory overtime due on the regularly scheduled pay day for the workweek in question. Failure to 

do so constitutes a violation of the FLSA. When the correct amount of overtime compensation cannot 

be determined until sometime after the regular pay period, however, the requirements of the FLSA 

will be satisfied if the employer pays the excess overtime compensation as soon after the regular pay 

period as is practicable. 

2. Is it legal for an employer to reduce the wages or number of hours of an hourly employee? 

The FLSA requires that all covered non-exempt employees receive at least the applicable Federal 

minimum wage for all hours worked. In a week in which employees work overtime, they must receive 

their regular rate of pay and overtime pay at a rate not less than one and one-half times the regular 

rate of pay for all overtime hours. The Act does not preclude an employer from lowering an 

employee’s hourly rate, provided the rate paid is at least the minimum wage, or from reducing the 

number of hours the employee is scheduled to work. 

3. Does an employer need to pay an hourly employee for a full day of work if he or she was 

scheduled for a full day but only worked a partial day due to lack of work?

The FLSA does not require employers to pay non-exempt employees for hours they did not work. 

4. In general, can an employer reduce an otherwise exempt employee’s salary due to a 

slowdown in business? 

Reductions in the predetermined salary of an employee who is exempt under Part 541 of the 

Department of Labor’s regulations will ordinarily cause a loss of the exemption. Such an employee 
must then be paid the minimum wage and overtime required by the FLSA, as discussed in FAQ #2

above. In some circumstances, however, a prospective reduction in salary may not cause a loss of 

the exemption. See FAQ #7 below. 

Section 13(a)(1) of the FLSA exempts from minimum wage and overtime pay “any employee 

employed in a bona fide executive, administrative, or professional capacity” as defined in 29 C.F.R. 

541. An employee qualifies for exemption if the duties and salary tests are met. See Fact Sheet 

#17A. 

FLSA section 13(a)(1) requires payment of at least $455 per week on a “salary” basis for those 

employed as exempt executive, administrative, or professional employees. See Fact Sheet #17G. A 

salary is a predetermined amount constituting all or part of the employee’s compensation, which is 

not subject to reduction because of variations in the quality or quantity of the work performed. 

An employer must pay an exempt employee the full predetermined salary amount “free and clear” for 

any week in which the employee performs any work without regard to the number of days or hours 

worked. However, there is no requirement that the predetermined salary be paid if the employee 

performs no work for an entire workweek. Deductions may not be made from the employee’s 

predetermined salary for absences occasioned by the employer or by the operating requirements of 

the business. If the employee is ready, willing, and able to work, deductions may not be made for 

time when work is not available. Salary deductions are generally not permissible if the employee 

works less than a full day. Except for certain limited exceptions found in 29 C.F.R. 541.602(b)(1)-(7), 

salary deductions result in loss of the section 13(a)(1) exemption. 

Deductions from the pay of an employee of a public agency for absences due to a budget-required 

furlough disqualify the employee from being paid on a salary basis only in the workweek when the 

furlough occurs and for which the pay is accordingly reduced under 29 C.F.R. 541.710. See FAQ #9

below. 

Physicians, lawyers, outside salespersons, or teachers in bona fide educational institutions are not 

subject to any salary requirements. Deductions from the salary or pay of such employees will not 

result in loss of the exemption. 

5. Can an employer reduce the leave of a salaried exempt employee? 

An employer can substitute or reduce an exempt employee’s accrued leave (or run a negative leave 

balance) for the time an employee is absent from work, even if it is less than a full day and even if the 

absence is directed by the employer because of lack of work, without affecting the salary basis 

payment, provided that the employee still receives payment equal to the employee’s predetermined 

salary in any week in which any work is performed even if the employee has no leave remaining. 

6. Can a salaried exempt employee volunteer to take time off of work due to lack of work? 

If the employer seeks volunteers to take time off due to insufficient work, and the exempt employee 

volunteers to take the day(s) off for personal reasons, other than sickness or disability, salary 

deductions may be made for one or more full days of missed work. The employee’s decision must be 

completely voluntary. 

7. 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 

$455 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. 

8. Can an employee still be on-call or performing work at home during a furlough day? 

Whether on-call time is hours worked under the FLSA depends upon the particular circumstances. 

Generally, the facts may show that the employee was engaged to wait (which is work time) or the 

facts may show that the employee was waiting to be engaged (which is not work time). 

For example, a secretary who reads a book while waiting for dictation or a fireman who plays 

checkers while waiting for an alarm is working during such periods of inactivity. These employees 

have been "engaged to wait." An employee who is required to remain on call on the employer's 

premises is working while "on call." An employee who is allowed to leave a message where he/she 

can be reached is not working (in most cases) while on call. Additional constraints on the employee's 

freedom could require this time to be compensated. 

Employees who perform part or all of their normal job duties during a furlough day are working while 

performing such duties. 

9. Are the rules for paying furloughed employees different for State and local governments? 

For non-exempt public employees, see FAQ #2. 

For salaried exempt employees, in the case of public sector employees, a specific rule applies to 

furloughs as described in the following regulatory text, 29 C.F.R. 541.710: 

Deductions from the pay of an employee of a public agency for absences due to a 

budget-required furlough shall not disqualify the employee from being paid on a salary 

basis except in the workweek in which the furlough occurs and for which the employee's 

pay is accordingly reduced. 

10. Does it matter if the State or local government employee is considered an essential or 

critical employee for the purposes of a required furlough? 

The application of the FLSA is not affected by the classification of an employee as essential or critical 

for the purposes of a required furlough. 

11. What remedies are available to correct violations of the FLSA when employees are not 

paid on a timely basis? 
a. The Secretary of Labor may bring suit for back wages and an equal amount as liquidated 

damages or for interest on the back wages, or the Secretary of Labor may bring suit for an 

injunction against the failure to pay wages when due. 

b. Employees who have filed complaints or provided information during an investigation are 

protected under the law. They may not be discriminated against or discharged for having done 

so. If they are, they may file a suit or the Secretary of Labor may file a suit on their behalf for 

relief, including reinstatement to their jobs and payment of wages lost plus monetary damages. 

c. An employee may file suit to recover back wages, and an equal amount in liquidated damages, 

plus attorney’s fees and court costs. Please note that the U.S. Supreme Court has ruled that 

the Eleventh Amendment prohibits employees of State governments from filing such suits 

against their State employers for monetary relief in federal courts (under Seminole Tribe of

Florida v. Florida, 517 U.S. 44 (1996)), and in State courts unless the State waives its 

sovereign immunity (under Alden v. Maine, 527 U.S. 706 (1999)). 

d. Civil money penalties may be assessed for repeat and / or willful violations of the FLSA’s 

minimum wage or overtime requirements. 

e. Employers willfully violating the law also may face criminal penalties, including fines and 

imprisonment. 

ADDITIONAL INFORMATION 

The Wage and Hour Division is available to assist. For more information regarding the FLSA, visit the 

WHD Web site at www.wagehour.dol.gov or call our toll-free help line, available 8 a.m. to 8 p.m. 

eastern time, at 1-866-4US-WAGE (1-866-487-9243)