Q. Will I risk losing an employee’s exempt status if I deduct from his or her wages for full-day absences of one or more days?
A. Generally, salaried employees must receive their full salary for any week in which they perform any work (without regard to the number of days or hours worked). However, regulations under the Fair Labor Standards Act provide that deductions may be made “when the employee absents himself from work for a day or more for personal reasons, other than sickness or accident.”
An employer can deduct for absences caused by sickness or disability where the absence is for a day or more “if the deduction is made in accordance with a bona fide plan or practice of providing compensation for loss of salary due to sickness or disability.” If the employer has a plan or practice that provides sickness or disability pay, the employee’s pay may be docked for full-day absences of one or more days during a waiting period, or after sick leave pay entitlement has been exhausted.
The key is that such deductions are limited to full days. Deductions for partial-day absences for personal reasons or sickness are not permitted.