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Can a salaried exempt employee take unpaid time off

I have a salaried exempt employee in the state of Virginia who has used all of her vacation and personal paid time off and would like to take 3 days unpaid time off. Can we back into an hourly rate and then pay her less for those 3 days? Can we take the 3 days pay off as a deduction (employee requested deduction). Also – if the employee requests this due to a two-week long illness can we take 1 day unpaid for the next several pays? What are the laws on this?

We would love to anwer this question for you, but we need more information. Is the employee taking this time off for personal business, illness or as vacation? Do you offer a bona fide paid sick leave program, or only vacation and personal time? Does the employee qualify for FMLA? Does she have a disability that might qualify for ADA? Why does the employee want the time off?

Generally speaking, it is not a good idea to pay the employee this week and deduct one days pay for each of the next 3 payperiods. You would basically be loaning the employee money, and should complete the same contract that you would require her to sign for a car loan from the company to the employee. Even then, it could be problematic to collect the money owed if the employee quit before it was all repaid.

No, you cannot switch this employee between hourly and exempt status. Once you pay her hourly, she is permanently non-exempt and entitled to overtime. In addition, the U.S. Department of Labor might see this as an indication that the employee always was non-exempt, and is owed overtime for the past 2 years.

There are options available — post another question with more specifics for a more detailed answer.

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7 Responses to “Can a salaried exempt employee take unpaid time off”

  1. » Can a salaried exempt employee take unpaid time off Human … « Human Resources 123 Says:

    [...] post: » Can a salaried exempt employee take unpaid time off Human … Comments [...]

  2. Lisa Says:

    We have a similar problem. The exempt employee has used all their PTO/Vacation. The required day off was for a sick, no requirement for FMLA or ADA. The employee requested to use 1 day of UPTO. Since the employee is salaried, I am not sure how to do this.

  3. Caitlin Says:

    Hi Lisa! This is actually a fairly common problem with a simple solution. As long as an employer offers a bona fide paid sick leave program, an exempt employee need not be paid when she has exhausted all sick leave and takes additional days off due to illness. If the employee normally works 5 days per week, and misses one day, you can pay her just 4/5 of her usual salary.

    If the exempt employee works even 5 minutes that day, even checking her email from home, she is entitled to her full days salary. However, if she does no work at all, you need not pay her for the day. Different rules would apply if the employee was available to work on this day, but she is not.

    Most employers would also write up the employee for excessive absences when the employee has exceeded all of her paid time off, does not qualify for FMLA or ADA yet is still absent. HTH, and thanks for reading the blogs!~ Caitlin

  4. Jackie Says:

    Caitlin, what happens if a company has a policy that if an exempt employee calls in sick, but check their email from home, or does any work, they do not pay them. Only if the employee steps foot in the office do they get paid (so, for example, I come in sick, but am sent home after being at work for 10 minutes, I am paid for the day. If I call in sick, I have to take PTO or go unpaid). Are they allowed to do this?

  5. Caitlin Says:

    Hi Jackie! The federal FLSA requires that an exempt employee who does any work at all during the day, even a few minutes of work, be paid his or her entire salary for the day. This is true even if the work is done from home. Company policy does not override federal regulations.
    When an exempt employee works just a few minutes from home, the company can require that the exempt employee use PTO for the day. However, if the exempt employee has no PTO remaining, he or she must still be paid for the day. The employee can be disciplined for excessive absenteeism, but must still be paid for any day in which the employee performs any work at all, even from home. The company could implement a policy that exempt employees are not permitted to work from home checking email, etc. but as long as this type of work is permitted, the employer must pay for it.
    If the company refuses to pay the exempt employee who works even a few minutes, even from home, they are in violation of the federal FLSA. In addition, they are treating this employee like a non-exempt worker, which might make them liable for unpaid overtime for the past 2 to 3 years.
    Even if the employee has agreed to another policy in writing, private agreements do not overrule federal regulations. HTH, and thanks for reading the blogs!~ Caitlin

  6. Lauren Walden Says:

    Hi there – asking this similar question – only 5 years later if seems from the last response :)

    We have recently given a promotion of an employee going from non-exempt, to exempt. In the past, she has taken “unpaid” days off since she was hourly. She is now exempt/salary and is asking if she can take a day unpaid like she has in the past. Please advise. We are a California small business if that matters in the answer. Thank you!

  7. hrlady Says:

    Hi Lauren,
    The law in this case hasn’t really changed. An exempt employee can take an unpaid day off but the deduction from her salary can only be in full day increments for personal reasons. Partial day deductions are not permitted. So, if the employee works at all even just a few hours, she must be paid for the whole day. HTH!

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