Opinion ID: 2639132
Heading Depth: 1
Heading Rank: 7

Heading: deductions from pay

Text: Petitioner Butcher-Evans contends she was an hourly employee because her employer instituted a policy in which hourly-based deductions in pay were made whenever a part-time instructor missed classroom time after earned accrued leave had been exhausted. She has not established that she was personally affected by that policy. An employee will be considered paid on a salary basis as long as the amount of pay the employee receives `is not subject to reduction because of variations in the quality or quantity of the work performed.' [46] The employee must receive full salary for any week during which work is performed without regard to the number of hours worked. [47] Generally, deductions for absences of less than a day are not permitted for employees paid on a salary basis. [48] When an employee is subject to deductions when no paid leave benefits are available, the employee's salary-based classification may be affected. [49] `An employee's salary is subject to reduction when there is (1) an employment policy that creates a significant likelihood of making partial day deductions, or (2) an actual practice of making deductions.'  [50] In this case, Respondent Green River Community College conceded it had a policy of reducing a part-time instructor's salary when the teacher missed a partial day of work and did not have any accrued sick or annual leave. [51] Respondent Green River argues, however, that its pay-docking system was created pursuant to principles of public accountability under federal regulations, specifically 29 C.F.R. § 541.5d (special provisions applicable to employees of public agencies). The Court of Appeals observed that [w]hile there is no Washington case law or legislative guidance dealing directly with this issue, it has been addressed in the federal arena. [52] Because the MWA is based upon the FLSA, the Court of Appeals looked to federal regulations as persuasive authority in the absence of adequate state authority. [53] Under federal law, otherwise exempt employees who work in the public sector do not lose their exempt status simply because employers deduct their pay for partial day absences if their accrued leave has been exhausted. Under 29 C.F.R. § 541.5d: (a) An employee of a public agency who otherwise meets the requirements of § 541.118 shall not be disqualified from exemption under §§ 541.1, 541.2, or 541.3 on the basis that such employee is paid according to a pay system established by statute, ordinance, or regulation, or by a policy or practice established pursuant to principles of public accountability, under which the employee accrues personal leave and sick leave and which requires the public agency employee's pay to be reduced or such employee to be placed on leave without pay for absences for personal reasons or because of illness or injury of less than one work-day when accrued leave is not used by an employee because (1) permission for its use has not been sought or has been sought and denied; (2) accrued leave has been exhausted; or (3) the employee chooses to use leave without pay. (b) 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. The Court of Appeals found the federal administrative rule announced in 29 C.F.R. § 541.5d persuasive and adopted it. Applying that rule to the facts of this case, the Court of Appeals held that Green River Community College's policy of deducting an employee's pay for partial-day absences after accrued sick leave has been exhausted does not affect that employee's exempt status under the MWA. [54] In this case, Respondent Green River Community College demonstrated that its pay-docking system was established pursuant to principles of public accountability as required under the federal regulation adopted by the Court of Appeals. The payroll manager of Green River Community College, Kelly Blackwood, in a declaration stated that [t]he purpose of the College's practice of reducing pay for work missed when leave is exhausted is to ensure public accountability; and to avoid gift of public funds question. [55] Respondent Green River Community College cites various laws and argues that those laws require Washington's community colleges to compensate their employees only for time worked pursuant to principles of public accountability. [56] Public accountability is the notion that `governmental employees should not be paid for time not worked due to the need to be accountable to the taxpayers for expenditure of public funds.' [57] Respondent Green River cites RCW 42.52.160 which states that: (1) No state officer or state employee may employ or use any person, money, or property under the officer's or employee's official control or direction, or in his or her official custody, for the private benefit or gain of the officer, employee, or another. Respondent also cites article VIII, section 7 of the Washington Constitution, which states that: No county, city, town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation. These laws [58] focus on paying employees only for time worked and ensuring that employees do not waste official resources on personal business. Respondent Green River Community College satisfactorily established that its pay-docking system was based on principles of public accountability. The compensation arrangement voluntarily entered into by each part-time community college instructor satisfies the salary basis test for a bona fide professional employee exempt from overtime pay under the MWA. Additionally, Respondent Green River Community College's policy of deducting pay for partial day absences from employees who have exhausted their accrued leave did not subject Petitioner Butcher-Evans to impermissible deductions inconsistent with a salary basis. One week prior to oral argument in this case, Petitioners filed a motion to permit filing of a second supplemental brief and, at the same time, submitted the proposed brief. The motion was passed to the merits. We deny it.