Government Shutdown Could Jeopardize FLSA Exempt Status

In light of the government shutdown, employers with ties to the government, including government contractors and nonprofit organizations, may need to make changes to their workforce, especially if the shutdown continues for an extended period of time.

Caution is urged, however, as these changes may have unexpected legal repercussions. For example, you risk losing FLSA exempt status – and thus incurring an overtime obligation for work in prior years – if an exempt employee is directed to take involuntary leave without pay for a period of less than a full week. As another example, if furloughs or layoffs are applied to a disparate number of employees in a protected category, employers could face allegations of discrimination.

While there are options available to employers, they can be tricky to navigate. Due diligence focusing on, among other things, potential paid leave statutory requirements is encouraged before deciding on any course of action.

Contact info: Meredith S. Campbell Chair, Employment and Labor Group, Shulman Rogers | T 301.255.0550 | F 301.230.2891

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