Perspectives

Navigating Partial-Day Absences for Exempt Employees: What Employers and HR Professionals Need to Know

Employment , The Compliance Center , WFJ Business Services WFJ Law Firm

Partial-day absences for exempt employees can create confusion for employers. The Fair Labor Standards Act (FLSA) has strict rules on salary deductions, and understanding these rules is essential to avoid costly compliance issues. Let’s examine a common scenario to highlight the right approach for managing partial-day absences in a compliant way.

Case Study: Partial-Day Absence Deduction

Scenario: Maria, an exempt employee, takes a half day off for a medical appointment. Her employer deducts four hours of pay from her weekly salary to account for this absence.

Impact: This deduction reduces Maria’s salary based on the hours worked, which is a violation of the FLSA. Exempt employees, under the FLSA, must receive their full salary for any week in which they perform any work, regardless of hours worked, with limited exceptions.

Correct Approach: Maria should receive her full weekly salary despite her partial-day absence. If her employer has a Paid Time Off (PTO) policy, they are permitted to deduct the four hours from her PTO balance instead. If Maria’s PTO is exhausted, her salary should still remain unaffected by the absence.

Key Takeaways for Employers and HR Professionals 

  • Understand the FLSA Rules on Salary Deductions for Exempt Employees

Exempt employees are generally entitled to their full weekly salary if they work any part of the week, with very limited exceptions. Partial-day deductions from an exempt employee’s salary are typically prohibited.

  • Implement a Clear PTO Policy

A well-defined Paid Time Off policy allows employers to manage partial-day absences in compliance with FLSA guidelines. Employers can deduct partial-day absences from an exempt employee’s PTO balance without affecting their salary.

  • Avoid Salary Deductions After PTO Exhaustion

If an exempt employee has used up all available PTO, you still cannot reduce their salary for a partial-day absence. It’s important to communicate this rule clearly to managers and payroll teams to prevent inadvertent violations.

  • Train Supervisors and Payroll Staff

Ensure that your HR, payroll, and supervisory staff understand how to handle partial-day absences for exempt employees. Training them on these guidelines can help prevent misunderstandings that lead to compliance issues.

Applying This Lesson to Your Business

Consider conducting a review of your PTO policies and payroll practices to confirm compliance with FLSA standards. Are partial-day absences being managed correctly for exempt employees? Do supervisors and payroll staff know the rules and understand the correct procedures? Making adjustments now can protect your business from potential penalties down the line.

Consult Legal Counsel to Ensure Compliance

Handling partial-day absences for exempt employees requires a clear understanding of FLSA rules and your own company’s policies. To ensure full compliance, consult with experienced legal counsel who can review your policies and help you implement best practices. Reach out to our team to discuss how we can assist you in navigating complex employment laws and maintaining compliant, fair practices in your workplace.

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