September 9, 2019

We get many tickets from clients regarding when it is appropriate to make deductions from an exempt employee’s pay. An employer’s trepidation here is understandable given that exempt employees must be paid the same amount of pay regardless or the quantity or quality of work performed in a pay period. However, there are some limited exceptions to this general rule. First, an employer may make deductions from an exempt employee’s salary when the employee is absent from work for one or more full days for personal reasons, other than sickness or disability. Naturally then, it follows that employers may not make partial day deductions from an exempt employee’s salary when the employee works any amount of time in a given day. So if an employee works, for example, one hour in a day and then is gone for the rest of the day to deal with personal issues, the exempt employee must be paid their salary for the full day. Employers can also make deductions from salary for absences of one or more full days when an exempt employee is out sick, if the deduction is made in accordance with a policy of providing paid sick leave. Tread carefully when making deductions from exempt employee’s salary, though, as the punishment for an employer improperly docking exempt employee’s salary is losing the exemption for all employees subject to that illegal pay practice for the duration of the time that the practice went on. For more guidance on this complicated issue from one of our licensed attorneys, reach out to us today!

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