Can you modify salaries for reduced telecommuting as an accommodation?

Q         We’re planning to allow employees with underlying health conditions to telecommute as a temporary reasonable accommodation during the COVID-19 pandemic. Based on our assessment, however, they could perform only 50 percent of their essential functions from home. Can we modify their pay rate accordingly?

A   Your plan must comply with the Fair Labor Standards Act (FLSA) and your state’s wage and hour laws. Your question implies the employees are paid a salary and you intend to reduce the salaries. If the salaried employee is nonexempt, the salary must compensate her at a rate at least equal to the minimum wage for each hour she works during the workweek, and you must pay overtime for all hours over 40 in any work week at an overtime rate of one-and-a-half times her regular rate. Assuming you will comply with both requirements at the reduced salary, the FLSA doesn’t prohibit prospective reductions in salary.

If the salaried employee is considered exempt from overtime, the question is more complicated. Usually, exempt employees must be paid a predetermined guaranteed weekly salary that isn’t reduced based on the quality or quantity (or hours) of their work. Week-by-week or day-by-day reductions in salary due to lower productivity would obviously violate this rule and potentially destroy the exemption. The U.S. Department of Labor (DOL) has recognized, however, that a prospective reduction in an exempt employee’s salary, when coupled with a reduction in work schedule, doesn’t violate the salary requirement as long as the change isn’t designed to avoid the exemption requirements.