Is It Legal to Suspend an Employee Without Pay?

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Suspending an employee without pay is a legal practice in the United States, but several restrictions limit the process. In most cases, employers may only place salaried workers on unpaid suspension if the employee violates a company policy.

The legal rules for unpaid suspensions vary based on the employee’s worker classification. According to Nolo, exempt workers receive a weekly salary and are not eligible for overtime pay. These workers must commit a serious infraction of company policy, such as sexual harassment or theft, for an employer to place them on leave. Employers may place non-exempt employees, commonly known as hourly employees, on leave without these circumstances. The Society for Human Resource Management cautions that any suspension that does not follow the standards set by the Fair Labor Standards Act could leave the company open to legal repercussions.