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Jan06

Sick/Vacation time and Salaried Employees

If an employee is salaried and comes into work but has to leave because they are sick after they have only worked 4 hours, how should the employer doc this? Is it legal for the employer to doc their sick time by hours? If they don’t have sick hours left can the employer doc their vacation time? If they have no sick or vacation time left can the employer doc the employee’s pay as long as they are paid per hour and are paid OT? The employee is not exempt.

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

Salary and hourly paid are compensation terms. Though uncommon, a non-exempt employee can be paid a salary each workweek.

Whether deductions from an employee’s salary are permissible depend on their FLSA classification. There are limited deductions allowed from an exempt employee’s salary. Feel free to review our previous posts regarding this.

In this case the employee in question is non-exempt and paid by salary. Even though the employee receives a salary, under the FLSA she is non-exempt and can be treated as such.

The employee’s sick time can be used as appropriate. If she only works four hours in a day, her sick time can be used to cover the time she missed. Whether vacation time should be used when sick time is exhausted is completely up to company policy/practice. Such a practice is common but should be explained to the employee. Using hourly increments for sick or vacation time deductions is acceptable. This is true for both non-exempt and exempt employees.

If the employee has exhausted all of her sick and vacation time, reducing her pay to account for the time off is acceptable since she is non-exempt. Again, there is a completely different set of rules for exempt employees.

Remember, non-exempt employees need only be paid for time actually worked. So, it’s permissible to reduce a non-exempt employee’s salary for time not worked. And, as you mentioned, they must be paid for all hours worked and receive overtime wages as applicable.

It’s worth mentioning that many employees who receive a salary automatically assume they’re considered exempt and deductions from their salaries are not always permitted. So, make sure the employee knows, if she doesn’t already, that although she receives a salary she is non-exempt.

This entry was posted on Wednesday, January 6th, 2016 at 12:55 pm and is filed under
Benefits, Compensation.
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