The following is a “cheat sheet” employers may use as a quick reference addressing some of the more common circumstances where deductions may legally be taken from an exempt employee’s salary and where deductions are not allowed.
- Full day absences taken for personal reasons. Example: An exempt employee who misses 1 ½ days of work for personal reasons, such as golfing or helping a family member move, could be docked 1 full day of salary because the absence was for personal reasons, but could not deduct for the additional half day.
- Full day absences occasioned by sickness or disability, if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability. Example: An employer that maintains a bona fide policy or practice which pays all or a portion of an employee’s salary during absences for sickness or disability, can deduct from an employee’s salary for any related absence occurring before, during and after such payments are exhausted, for any period of full day absences covered by this policy.
- Infractions imposed in good faith for violation of safety rules that are of major significance. Example: An employer may legally make a deduction from an exempt employee’s pay as a penalty for a serious safety rule violation such as smoking in a coal mine.
- Disciplinary suspensions imposed in good faith for infractions of “workplace conduct rules” – must be pursuant to a written policy applicable to all employees. Example: An employer may legally impose a three-day unpaid suspension for violating a written policy applicable to all employees prohibiting sexual harassment.
- Exempt employees who are on unpaid FMLA leave need not be paid under that law.
DEDUCTIONS NOT ALLOWED
- Less than full day absences regardless of reason.
- Full day absences occasioned by sickness or disability, where there is no bona fide plan, policy or practice of providing compensation for loss of salary occasioned by such sickness or disability.
- Infractions of safety rules that are not of major significance.
- Infractions of unwritten workplace conduct rules or rules that address things other than workplace conduct (e.g. attendance infractions for tardiness).
Wage and hour law can be tricky and any of the above rules can be impacted by any number of nuances. Accordingly, for questions regarding exempt employee status, salary deductions, or related issues please contact attorney James Sherman at 952-746-1700 or firstname.lastname@example.org.
James Sherman, Esq.
President and CEO
9800 Shelard Parkway, Suite 310
Minneapolis, Minnesota 55441