Human Resource Blog

Exempt employees - Closing Early vs Vacation Time

When we close the office early/send everyone home the day after or before a holiday, are the exempt employees that took a Vacation Day for those days docked for vacation time or as Paid Holiday?

This is a matter of a best practice in HR rather than employment law. The only relevant federal employment law is the FLSA, the Fair Labor Standards Act. The FLSA states that an exempt employee who works any portion of the day, must receive his or her full days salary. The law does not specify how that time will be counted. If Bob worked 2 hours, you must pay him for the full day. But you could deduct 6 hours of vacation from his available balance, if you like.

When an exempt employee does no work at all during the day, that changes the situation slightly. If the exempt employee plans in advance to take a vacation day, then it is appropriate to deduct vacation time from the employees balance for the whole day. It is simply the employees misfortune that he or she chose to take a day of vacation on a date when other employees were sent home early.

It would not really be appropriate for the employer to count the time off as a paid holiday. Most employers offer a limited number of paid holidays per year. It would be unfair and possibly illegal discrimination to offer Bob 9 paid holidays this year, while offering other employees only 7 paid holidays.

If the exempt employee works on the day before Thanksgiving or on Christmas Eve and is sent home early, it would not be appropriate to count that time as either holiday pay or vacation pay. The exempt employee is entitled to his or her usual days salary when the employee works any part of the day. Legally, an hourly employee need be paid only for the hours worked.