Courts Differ on Half-Day Deduction Rules — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Courts Differ on Half-Day Deduction Rules

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Q. You've said that a company can't deduct a half-day for an exempt employee who has used all her sick and vacation time; it must be in full-day increments. But what if the employee hasn't used all her banked sick and vacation time? Could an employer require the employee to use that instead? —S.V., North Carolina

A. The Labor Department has indicated that it's OK to deduct from accrued-leave banks in part-day increments when an employee is absent for less than one full day, as long as the employee receives an amount equal to his or her fixed weekly salary. Several courts (including the 9th and 10th Circuits) have essentially adopted Labor's position. In contrast, at least one court (the 7th Circuit) has said that part-day deductions from accrued leave banks violate the salary basis test. Because of this conflicting legal authority, you should consult with your labor attorney on the issue.

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