Deducting exempts

EJennieS

"If an exempt employee is absent from work for one or more full days for sickness or disability, you can deuct from pay in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by such sickness or disability."

1)We don't have a sick day policy; (2)we have a disability plan which pays on the 8th day of sickness. Does this constitute a bona fide plan even though the first 7 days would be unpaid?

Geno

Jennie,

Where is the source of the italicized sentence?

What have you done in the past?

If it has never happened before (not sure how that is possible unless you are new company) you can either pay the employee as if he/she were at work (might not want to set that precedence), or you can deduct a full day's salary for a full day's absence unless the italiciized sentence came form your policy manual -- in which case you should inform your supervisor that the policy, as written, does not cover all scenarios.

crawfod

She got the phrase from 29CFR 541.602, and you can make deductions from exempt employees. For example, if you have a STD plan that pays benefits after a 7 day disability waiting period, and then pays 60%, you don't have to pay the full salary. DOL regs however do not expressly address whether the salary replacement benefits in this case must equal 100% of the salary. But once an exempt performs no work during an entire workweek, you don't have to pay the salary, regardless of the reason.