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Salaried Time Off

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scotttitzer
Posts: 7
Joined: Fri Jun 08, 2018 11:00 am

Salaried Time Off

Post by scotttitzer » Wed Jun 20, 2018 8:07 am

Can employers legally grant 1/2 and whole days off to salaried employees as part of the "time off" policy and charge those days against their allowed vacation? I have always been told that you must pay salaried employees for the entire week if any portion was worked.

Wescon2810
Posts: 3
Joined: Thu Jun 21, 2018 11:02 am

Re: Salaried Time Off

Post by Wescon2810 » Thu Jun 21, 2018 11:17 am

Exempt employees are paid for their knowledge, not their time. At my company I will not ask an exempt employee to use PTO if they have worked any part of the day, this includes answering phone calls or emails from home.

I also suggest that you read through your employee handbook to see if anything is mentioned in it regarding exempt employees attendance, if it does then legally that is what you need to follow, or change.

HRothenbuecher2018
Posts: 6
Joined: Fri Jun 22, 2018 12:06 pm

Re: Salaried Time Off

Post by HRothenbuecher2018 » Fri Jun 22, 2018 12:07 pm

There are a few answers depending on what the issue is exactly. Are we looking to (1) reduce salary for the time off or (2) simply require the employee to use the appropriate bank of leave (PTO or vacation) without any reduction in salary.

(1) Generally, an employer must pay an employee the entire salary for any workweek in which the employee performs work. 29 CFR 541.602(a) (salary “is not subject to reduction because of variations in the quality or quantity of the work performed … an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked.”). However, if the employee takes personal leave (for personal reasons not including illness/sickness or disability), the employer is permitted to deduct the equivalent of one day’s pay for any day in which the employee does not perform any work. 29 CFR 541.602(b)(1) (“Deductions may be made when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability. Thus, if an employee is absent for two full days to handle personal affairs, the employee’s salaried status will not be affected if deductions are made from the salary for two full-day absences.”) However, the employer may only deduct for whole day absences. Id. If the salaried, exempt employee works for an hour and takes the rest of the day off (i.e., starting a long weekend early), the employer must pay the salary for the entire day.

(2) Although an employer may have to pay the full salary for the absence, an employer is still permitted to make partial and full day deductions from an employee’s accrued or promised paid vacation leave (vacation, PTO, sick). DOL WHD Opinion Letter FLSA2005-7. The reduction cannot result in a reduction of the employee’s guaranteed salary for the week in which hours are reduced. Id. If an employee’s vacation bank is exhausted, the employer must still pay the full day’s salary for the partial day absence, although the employee may be subject to discipline for exceeding the allotted balance.

Hope this helps.

Alan Rothenbuecher
har@beneschlaw.com

Troyonix29
Posts: 37
Joined: Mon Feb 26, 2018 10:09 am

Re: Salaried Time Off

Post by Troyonix29 » Tue Jun 26, 2018 11:20 am

Alan, I just got off the phone with a MAPP member who indicated that your feedback was extremely helpful.

Although I am not sure you are able to answer, I've received a follow-on question.

If a salaried employee has exhausted their PTO and takes a full day off, can the employer deduct 8 hours pay for that pay period - avoiding the full week pay rule?

You mention "subject to discipline" for exceeding allotted balance. Can the discipline policy be deduction of appropriate amount of pay if it is a formal policy?

Thanks, Troy

DaFunkyFrog
Posts: 11
Joined: Thu May 31, 2018 6:49 am

Re: Salaried Time Off

Post by DaFunkyFrog » Wed Jul 18, 2018 6:46 am

Awaiting Alan's reply to Troy's follow up post question.

In addition to the original post reply, can we verify?: If the company is shut down for a holiday that is a paid benefit and they extend the time off by one day stating "shut down", can they ask exempt employees to utilize a PTO in order to be covered and is the company able to deduct that 8 hours from that employee? Further, what if the PTO balance has been exhausted?

HRothenbuecher2018
Posts: 6
Joined: Fri Jun 22, 2018 12:06 pm

Re: Salaried Time Off

Post by HRothenbuecher2018 » Fri Jul 20, 2018 2:43 pm

My answers below:

(1A) If a salaried employee has exhausted their PTO and takes a full day off, can the employer deduct 8 hours of pay for that pay period?
Employers are permitted to deduct the equivalent of a full day's pay when the salaried employee does not perform work and is absent for personal reasons not including illness/sickness or disability. The employer may deduct a full day's pay for each full day's absence in this context.

(1B) You mention "subject to discipline" for exceeding allotted balance. Can the discipline policy be deduction of appropriate amount of pay?
This seems like a double penalty. Discipline plus lost wages (even if there is no discipline other than lost wages). The DOL opinion letter cited previously discusses discipline as an alternative when an employee take a partial absence and does not have a PTO/vacation balance to cover the absence. Because it is a partial day, the answer in 1A does not apply and salary cannot be reduced. In that context, the employer may issue discipline instead. The question in 1B appears to do both - issue discipline and reduce salary. It seems like overkill, even if permitted.

1A and 1B - practically, it seems to make more sense to deduct salary for full day absences and issue discipline for partial absences. I WOULD NOT deduct pay as discipline for a partial absence when the employee does not have a leave balance to cover the absence. Discipline is the remedy. Making the discipline lost wages appears to intentionally work around the regulations. That sort of punishment is also more akin to progressive discipline of hourly employees that includes an unpaid suspension.

(2) Whether the company can extend a holiday to cover a "shut down" and require exempt employees to use PTO to be paid? What if PTO is exhausted?
I do not believe the employer would be allowed to deduct salary for the one-day shutdown - this is not personal leave of the employee, as the regulations discuss. Also, if PTO is exhausted, I do not think the employee should be subject to discipline where the employer is preventing the employee from coming to work.
I do not think the answer to (1) above apply. This is a narrower issue, but I don't think the regulation allow the employer to prevent the employees from working and then require the employees to use PTO to avoid a salary reduction for the week. If no PTO balance is available, then the employee would be prevented from working and forced to lose a day's pay (with or without discipline) even though the absence is not for "personal leave" as the regulations state. I think this stretches the regulations too far.

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