Employers often face challenges trying to figure out salaries for exempt employees who take off a half day to attend a social event when they have already exhausted all of their paid time off. Should the employee have a reduction in salary for that day? Here is an answer that we found helpful.

For a half day, no. As a general rule, if an exempt employee performs any work during the workweek, they must be paid their full salary. If the employee were taking off one or more full days for this social event, then a deduction from their salary would be permissible. A half day, however, does not qualify for a deduction. That said, if the employee has paid time off (PTO) available, you could deduct from that bank of hours for a partial or full day absence—this is not considered a salary deduction since they will still get their regular pay as a result of using PTO.

Here are the situations in which deductions from salary are generally permissible for exempt employees:
• For any workweek in which the employee performs absolutely no work.
• In the initial or final week of employment.
• For absences of one or more full days for personal reasons other than sickness or disability.
• For absences of one or more full days due to sickness or disability if the deduction is made in accordance with a bona fide plan, policy, or practice of providing pay during illness. The DOL has said that for a plan to be “bona fide” it must provide at least five days of per year that can be used when an employee is sick.
• To offset amounts an employee receives for being a jury member or witness, or for military pay.
• For leave under the Family and Medical Leave Act.

Content courtesy of the HR Support Center – https://affiliatedpayroll.myhrsupportcenter.com