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Ask the HR Expert — Exempt Pay Rules

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Ask the HR Expert — Exempt Pay Rules

Q: An exempt, salaried employee missed multiple days of work for personal reasons. Can we deduct these missed days of wages from their salary or do we pay the employee for the days they did not work?

A: Generally you need to pay exempt employees for weeks in which they perform any work.

However, there are a few exceptions in which you can make deductions for FULL-DAY absences:

1. Exempt employees who are absent for a day or more for personal reasons other than sickness or an accident. (Remember: these deductions can only be made in full-day increments – not for partial-day absences.)

2. If your company has a policy that provides compensation for lost salary from sickness or disability and the employee exhausted his or her paid leave.

3. Penalties imposed for violating safety rules of major significance. Deductions may not be made for absences caused by employee jury duty, attendance as a witness, or temporary military leave.

4. Unpaid disciplinary suspensions of one or more full days for breaking workplace conduct rules.

5. Partial weeks worked during the initial or final weeks of employment. For example, if Joe resigns in the middle of a workweek, pay him only for the days he actually worked in that week.

6. In some cases, when a salaried/exempt employee has worked a reduced or intermittent work schedule under the Family and Medical Leave Act (FMLA). (You can convert a salaried employee to an hourly rate during the time he or she is on intermittent or reduced-workweek FMLA leave without compromising the person’s exempt status.)

Bottom Line:
Docking an exempt employee’s pay is tricky. First, check your company’s time off and pay policies. See if certain full-day exclusions apply.

Additional Resources:
The Department  of Labor Fact Sheet on Exempt Employees

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Camille Bradbury

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