Q&A: Key considerations for an administrative leave policy

Question

We are considering creating a formal administrative leave policy that will mostly be used as a “cooling-off” measure while an organization considers or investigates potential disciplinary action. We understand that this practice is common in both government and private sectors, especially when the presence of the employee at the workplace might interfere with an investigation or create tension among colleagues. What should we be considering with regards to this type of policy?

Answer

An administrative leave for disciplinary/investigative reasons (suspensions), particularly if unpaid should be a last resort. Unpaid leave is likely to be perceived as discipline, and even paid leave can have negative connotations for the employee or their coworkers.

An employer does not have to suspend an employee during an investigation but may make sense in certain situations. Paid administrative leave allows an employer to temporarily remove an employee from the workplace to address a particular situation. It can diffuse tension, separate accuser and accused, maintain workplace safety and environment, and prevent further behavior of which the employer is accused, such as theft.

It is generally recommended that employees being placed on administrative leave for accused misconduct be paid. This will help to avoid wage and hour as well as discrimination claims, particularly as the allegations have not yet been corroborated.

Paid or unpaid leave?

As a general rule, nonexempt, hourly workers only have to be paid for time actually worked under the federal Fair Labor Standards Act (FLSA). So, in the case of a disciplinary suspension, they do not have to be paid for the time they do not work while on suspension. (This is true absent a collective bargaining agreement or other contract or policy indicating that nonexempt employees would be paid for disciplinary suspensions.) You should check to see if your state laws treat this differently than the FLSA.

For salaried exempt employees, any disciplinary suspension likely must be paid unless it meets specific criteria under the FLSA. An exempt employee is one who is exempt from the overtime requirements of the FLSA because of the employee’s job duties (usually as an administrative, executive, or professional employee) and the payment on a salary basis.

Under the FLSA regulations, salary basis is defined as payment on a weekly or less frequent basis of a predetermined amount constituting all or part of compensation, without reductions for variations in the quality or quantity of the work performed. Thus, exempt employees generally must receive their full salary for any week in which they perform work, without regard to the number of days or hours worked. Further, deductions cannot be made from an exempt employee’s salary for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing, and able to work, deductions may not be made for time when work is not available. See 29 C.F.R. §541.602(a).

The FLSA allows limited deductions from an exempt employee’s salary. Specifically, the FLSA regulations allow deductions for disciplinary penalties imposed in good faith for infractions of safety rules of major significance, such as those relating to the prevention of serious danger to the worksite or other employees, such as no smoking rules in explosive plants, oil refineries, and coal mines. Further, unpaid disciplinary suspensions of one or more full days may be imposed in good faith for workplace conduct rule infractions. To apply this deduction, the employer must have a written policy that is applied to all employees, and the term “workplace conduct” covers only inappropriate conduct, including harassment, violence, drug or alcohol violations, or violations of state or federal laws, and not performance or attendance issues. See 29 C.F.R. §541.602(b).

So, exempt employees who are suspended for disciplinary reasons should be paid during any week in which they are suspended and also perform work, such as during a period where a suspension is used to cool off, unless the disciplinary action meets the criteria discussed above and then the suspension may be unpaid.

With respect to unpaid administrative leave, some employers have policies that provide that an employee will be paid following an investigation if the allegations are determined to be unfounded.

Anti-discrimination considerations

Most federal courts have agreed that the employer practice of placing employees on paid administrative leave while they investigate accusations of employee misconduct or make decisions regarding the employees’ employment, without more, did not constitute an “adverse employment action” under Title VII. Such claims can be further avoided by having clear and well-defined policies applied consistently.

Best practices for investigations

• Maintain confidentiality. Although certain details must be revealed to conduct the investigation, everyone involved should be cautioned against discussing the matter beyond those with a need to know. You may even need to threaten discipline for employees who spread allegations beyond legitimate bounds. You can also remind them that individuals can be liable for defamation if they spread damaging, false information about another.
• Use a third person. It is usually advisable for the investigator to choose a third person to sit in on each interview. Not only can this individual serve as a witness if statements made in the session are questioned later, but the investigator can take notes, leaving the interviewer free to concentrate on the discussion. Moreover, the third party’s notes can serve as the official record of the session.
• Include detailed documentation. Every investigation should be documented with the worst-case scenario in mind; that is, with the investigator being cross-examined in front of a jury about every sentence in the investigation report. Reports should be thorough and thoughtfully written. Ideally, witness statements should be signed by the witnesses. Avoid typos and grammatical mistakes. And while most investigations into misconduct come down to a credibility determination, too often there is nothing in the documentation that explains why an investigator believed one person and not another. When offering conclusions about a witness’s credibility, the investigator should set forth the objective basis for the determination. For example, the witness’s demeanor and motives, the extent of corroboration by other witnesses or evidence, and the past history of similar accusations or conduct should all be documented.
• Document in writing. All interviews should be memorialized in writing. Notes should be made during the interview. If that’s not possible, they should be made immediately after the interview. If a witness doesn’t speak English very well, an interpreter should be obtained to translate.
• One at a time. The witnesses should be interviewed individually (as opposed to in a group setting). Witnesses are more likely to be truthful if they aren’t surrounded by the watchful eyes of their coworkers.
• Don’t rush. Getting the facts isn’t an easy job. It takes time. That’s why interviews should never be rushed. A good rule of thumb is this: An interview will generally take twice as long as anticipated. Why? Finding out facts, not conclusions, is a time-consuming process. Furthermore, many witnesses are nervous and want to get the interview over with quickly, so they rush and leave out information. If the interview is too short, important information is probably missing. Also, it’s important to go through a person’s statement to verify the facts, straighten out any misunderstandings, and clarify any ambiguities. That can’t be done in 5 minutes.
• Chronological order. The sequence of events in an investigation report should be presented chronologically. What happened first, what happened after that, and what happened last. If the person being interviewed has a hard time going chronologically, that’s OK. It’s all right to let the interviewee bounce around a little bit as long as the interviewer brings the person back to the chronology.
• Get a clear picture. The interviewer should assist witnesses in translating their thoughts. That’s not the same thing as putting words in their mouths. Rather, it’s helping them say things in a way in which they are comfortable. For example, estimating distance, time, or numbers may prove difficult for some people. Witnesses tend to believe that unless they can be absolutely accurate, they shouldn’t speculate. In the course of an investigation, a witness may be asked how many times something occurred. A response like “I don’t recall” or “I don’t remember” should be met with a follow-up question estimating a high number of occurrences, such as 50, and asking whether it happened more or less often than that.
• Get facts, not conclusions. Start the interview with broad, open-ended questions, but follow up with more specific questions to obtain all relevant information. Listen to what is not said as well as what is said and follow up on all leads and any ambiguous or incomplete responses. Ask questions about exactly what occurred and what the witness saw or heard.
• Close the interview. Several points should be covered at the conclusion of the interview to make sure the interviewee feels they have had a chance to be completely heard. Always ask the person whether there is any other information that may be relevant but wasn’t brought up and if there are any questions that they feel should have been asked but weren’t. Explain that if there is anything they remember after the interview, the investigator should immediately be contacted. The investigator should explain in detail how they can be reached.

Best practices for handling employee administrative leaves/suspensions

• Have a written policy applied consistently.
• Meet with the employee to explain the reason and process for the administrative leave/investigation, as well as possible repercussions.
• Have employee return any company property in their possession.
• Provide the employee with written guidelines and expectations during the suspension. This might include things such as staying away from the company premises, not performing any work, not contacting employees and/or customers, who to contact with questions.
• Document all conversations with suspended employee.
• Maintain confidentiality.
• Put security measures in place, including company systems and networks, protection of company property and confidential information, and protection of employees.
• Conduct the investigation in a timely manner.
• Provide the suspended employee with estimates/updates as to how long the investigation/suspension will last.

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