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Jan17

Deductions from Exempt Employee’s Salary

I have a salaried employee in 90 day probationary period. She is earning PTO. She only worked 1 hour yesterday and is not eligible to take PTO until her 90 days is up. Can I deduct her wages for the hours not worked or because she is salaried I have to pay the weeks wages? This is in the state of California.

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. Employers in California must adhere to the FLSA.

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.

Let’s assume the employee in question is exempt under the FLSA.

Deductions from an exempt employee’s salary are permissible in limited circumstances including:

• When an employee is absent from work for one or more full days for personal reasons other than sickness or disability;
• For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for salary lost due to illness and the employee has exhausted such paid leave;
• To offset amounts employees receive as jury or witness fees, or for temporary military duty pay;
• For penalties imposed in good faith for infractions of safety rules of major significance;
• For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions;
• In the employee’s initial or terminal week of employment if the employee does not work the full week, or
• For unpaid leave taken by the employee under the federal Family and Medical Leave Act (FMLA).

Deductions for partial day absences generally violate the salary basis rule under the FLSA, except those occurring in the first or final week of an exempt employee’s employment or for unpaid leave under the FMLA.

Thus, assuming the employee didn’t take FMLA leave, she must receive a full day’s pay for the partial day worked.

This entry was posted on Sunday, January 17th, 2016 at 2:59 pm and is filed under
Compensation.
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