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Can we dock employees pay for poor work quality?

By: Bill Wortman



Our company is residential remodeling. Our employees have had issues with having to redo work on some of our projects. We’ve considered “docking” their pay the hours that it takes to do the work a 2nd time. Is this legal? If not, is there something we can do that will help them see we are serious about continued mistakes that cause delay of the job being completed and added expense directly to the job as a result of having to do the work more than once?

As a general rule, the Federal Fair Labor Standards Act, or FLSA, prohibits docking the pay of employees (nonexempt or exempt) for poor quality work or work resulting in rework.  Nonexempt employees are employees who are subject to the FLSA’s minimum wage and overtime pay requirements and are typically paid on an hourly basis. Under the FLSA, nonexempt employees must be paid for all hours worked during the workweek.  Exempt employees are employees who are not subject to the FLSA’s minimum wage and overtime pay requirements and are typically paid on a salary basis. Under the FLSA, exempt employees can only have their pay docked or reduced under certain specific circumstances.  However, whether the employees in question are nonexempt (hourly) or exempt (salaried), you cannot have the employees perform rework and then not pay them for the time they spend doing the rework.

As to other options, nonexempt employees can be suspended without pay for variations in the quality or quantity of work they perform.  Therefore, you could consider implementing some form of progressive disciplinary policy for your company with respect to poor quality work by its nonexempt employees that includes suspension without pay and possibly termination for violating the policy.  Of course, if your nonexempt employees generally perform quality work and only occasionally demonstrate work quality issues, you will need to use care implementing and enforcing such a policy so that you do not place your business at a competitive disadvantage and drive otherwise good employees away from your business. Since we do not know all the details of your workforce and the work quality issues you are experiencing, we recommend that you consult a local labor lawyer to review your situation in detail and help you draft a progressive discipline policy for and otherwise provide definitive labor law compliant guidance to your company.

For discussion with your lawyer, you can review example articles on the labor law considerations with docking employee pay at the following websites:

Pros and cons of progressive discipline policies:

Published: March 3, 2014

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