Why were employers hesitant to reduce the workloads of exempt employees?
Based upon the restriction of the salary basis test, employers have been understandably reluctant to implement partial week shutdowns or furloughs of their exempt employees for fear they would jeopardize their exempt status, thereby exposing the business to overtime obligations. Although there was support for these partial week reductions in federal law, until recently, the California Division of Labor Standards Enforcement had taken the position that such an arrangement, in fact, violated the salary basis test. In confronting the issue most recently, however, the California Division of Labor Standards Enforcement analyzed the wealth of federal law on the issue, and recognized the scarcity of California case law directly on point. In addition, the prior opinion letter of the California Division of Labor Standards Enforcement declaring that partial week reductions in pay and hours violated the salary basis test relied upon federal authority that has since been roundly criticized as misg
