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