During the holiday season, many employers shut down their operations for a few days over Thanksgiving, Christmas, or New Year's. If you're thinking of closing up shop for the remaining holidays this year, first make sure you're up on special pay rules for employees who qualify as exempt from overtime.

If an exempt employee performs any work in a workweek, you must pay the employee his or her full salary for that week. On the other hand, if you shut down your operations for a full workweek, you don't have to pay exempt workers for that period.

However, keep in mind that you can't force exempt employees to use up their accrued vacation or other paid time off during the temporary furlough unless you provide the employee with "reasonable notice" before requiring use of vacation or paid time off. This means the notice must be given as far in advance as possible but generally no less than one full fiscal quarter or 90 days, whichever is greater.

Additional Resources:

Exempt Employees: Labor Commissioner Changes Guidance on Vacation and Paid Time Off, from the March 2005 issue of CEA. (Start your guest access and get this now)

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