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An employer may suspend an employee, assuming that the suspension is not applied for absenteeism, which may be protected by the federal Family and Medical Leave Act, California Family Rights Act, federal Americans with Disabilities Act, workers' compensation, pregnancy leave or any number of other protected bases.
Before deciding to suspend an employee, however, employers should also consider the following factors:
Investigative Suspension. If the reason to suspend the employee is due to an internal investigation, and the employer does not want the employee under investigation to remain in the workplace, an employer may choose to suspend the employee until the investigation is complete.
This type of suspension is not disciplinary in nature and generally results in the employee continuing to be paid until a decision is reached about continued employment or discipline. The reason that pay is continued is that guilt or blame has not been determined; therefore, punishment should not be assessed.
Disciplinary Suspension — Nonexempt Employee. The other form of suspension is disciplinary suspension. This generally is the last step in a progressive disciplinary policy. It can be very effective when used as a final warning or wake-up call to let the employee know what it will feel like to not be able to go to work or be paid for that time.
Disciplinary Suspension — Exempt Employee. An employer also may place an exempt employee on a disciplinary suspension; however, the employee's salary must be continued if the suspension is for less than a full workweek. Although an employer may feel that if you have to continue to pay an employee, there is no punishment, being placed on suspension is a very strong disciplinary action and can be effective in changing performance. The suspension also will document that the employer used progressive discipline.
Employers must treat exempt and nonexempt employees differently in regards to pay.
For a nonexempt employee, there is no requirement to pay the employee during the suspension. Nonexempt employees are generally not paid for hours not actually worked.
WARNING: If an employer suspends an exempt employee for less than a full workweek, the employee must be paid for the time for the purpose of maintaining the employee’s exempt status.
Both the U.S. Department of Labor and the Labor Commissioner allow an exempt employee to be off a full workweek without pay.
Even if the suspension is for a full workweek, the Labor Commissioner raises the caveat that if such a suspension, without pay, reduces the employee’s monthly salary to an amount less than the statutory minimum, the exemption could be lost.
Employers also should be aware that if the exempt employee works part of the day, they must be paid for the whole day.
Employees should be told at the time of the suspension whether the time will be paid or not, and employers should be consistent in their practices.
One additional factor employers need to be aware of is that the Labor Commissioner characterizes the last day of work as the date that an employee must receive their final paycheck. This applies to all employees, exempt and nonexempt.
To avoid waiting-time penalties, employers should consider that the time an employee is on suspension will be counted as waiting-time penalties against them if they follow up the suspension with termination.
A classic case where this comes up with some regularity is where the employer already has decided to terminate the employee but is not ready with the final paycheck, so the employer tells the employee that they are on suspension. The employee's final day of work is the first day of suspension, and, for purposes of a Labor Commissioner claim, that day also will be the first day of waiting-time penalties if the employee does not receive their final pay that day.
Waiting-time penalties are equal to the employee's daily wages for as much as 30 days maximum. To avoid waiting-time penalties, the employer should pay the employee's final wages on their last day of work. If the employer is not ready to terminate the employee, the employer should forgo a suspension or pay the employee while they are suspended.