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Court affirms deductions from exempt’s leave bank

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in Office Management,Payroll Management

It’s long been federal policy that you may deduct partial days off from an exempt’s accrued leave time without jeopardizing that status, because partial-day deductions from accrued leave banks aren’t the same as partial-day deductions from pay, which could throw that status into doubt. Does the result change if you overlay a state wage payment law that categorizes accrued vacation as nonforfeitable wages? No, according to a California appeals court, which confirmed the federal rule that partial-day deductions from accrued leave don’t convert an exempt employee into an overtime-eligible nonexempt. (Rhea v. General Atomics, 227 Cal.App.4th 1560, 2014)

Partial-day deduction dispute. A company’s accrued-time-off policy first required exempt employees to charge absences of four hours or longer to their accrued leave banks. The policy was later revised to require employees to charge any absence. Although deductions were made from ...(register to read more)

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