Exempt Use of Vacation, Personal Days

I've read most of the postings in this category and understand that exempt employees shouldn't be docking themselves for time out of the office of less than a day. But is it a violation of FLSA if exempt employees use vacation and personal days in 1/2 day increments instead of whole days?

Comments

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  • This is a current (and on-going) debate at our company too. In fact I have to prepare a presentation for our board of directors to explain the "ins and outs" of exempt/non exempt laws. The FLSA regulation says that if an employee is absent for a DAY or MORE (my emphasis) because of sickness or disability and a deduction is made in accordance with a bona fide plan, policy or practice of providing compensation then the salary can be reduced. (29 C.F.R. 541.118(a)(3)

    According to the FLSA "DOL Wage and Hour Opinion Letters consistently have ruled that deductions from leave banks are permissible. A letter dated July 17, 1987 states that: "An employer can require an employee to substitute paid leave for absences of less than a day without losing the exemption for the week." This was used in a ruling by the 4th Cir. Court. The DOL reiterated its decision in letters dated 4/9/93 and 4/15/94.

    However the 9th Cir. stated "in fact, a strong argument can be made that even if deductions were required only from fringe benefits such as leave time, and not from base pay, the affected employees would still not qualify as 'salaried'." Then proceded to turn around and reverse its position.

    In closing, my FLSA Employee Exemption Handbook states it is clear that the DOL, through its Wage and Hour Opinion Letters, believes that reductions in leave accounts in increments of less than a day are permissible under the salary basis test. It further states that employers who choose to make deductions from exempt employees' leave banks by the hour, however, should establish clear policies regarding how they will deal with employees who have no leave bank, or negative leave bank, balances. Any such policy should make clear that while a reduction in leave by the hour may be acceptable, an employee will not suffer deductions in pay for anything less than a full day.

    How can employers know what to do when the courts can't even make up their mind??? How does everyone else handle this??? Some of our board members want the deductions made. I believe that our exempt staff puts in so many extra hours they should be entitled to this "perk"(?).



  • Our non-exempt employees have a bank of 40 hrs. of personal time they can use over a one year period. Can we have the same for our exempt employees? If an exempt employee uses more than the allotted 40 hours/year, we would NOT deduct their pay - we would take it into consideration when calculating year-end bonuses. Do you see a problem with this?
  • [font size="1" color="#FF0000"]LAST EDITED ON 04-17-02 AT 07:21AM (CST)[/font][p]At our company we have 80 hours of sick time given to salaried/exempt employees. If they are sick for any portion of the day, their leave bank is docked and this is fine according to FLSA (in my understanding of the law). When they run out of sick time, and if they are absent due to illness for a portion of the day, we do NOT dock their pay. They are paid for a whole day any time they work even for five minutes of any given workday.

    Our general manager also looks at total hours put in during the span of a year, and (right or wrong) I know he takes all extra hours (over 40 per week) put in into account when he gives out bonuses, in addition to quality of work produced etc. It seems to obviously be contradictory to FLSA rules, because salaried/exempt ee's should be able to do whatever it takes to do their job well, regardless of how many/little hours they put it, as long as the job is done well...... but anyway he does do it.

    memiller: I wouldn't see a problem with the practise you use because you would be looking at absenteeism in general, rather than how many hours they put into doing their jobs (as my general manager is doing...)
  • We allow our exempts to take vacation in 4 hour increments. They like being able to take 1/2 a day here and there. If they are to be out for personal leave for only a couple hours, we don't charge it to anything and figure they make up for it. Usually if they are out 1/2 a day or more, however, we would charge an account (personal, sick, vacation). However, if they run out of leave, we would not dock them for partial days.

    The danger we run in this type of program is that theoretically someone could complain that the reason they ran out of leave was because they took the partial days. If they hadn't taken the partial days, they would have had more leave remaining. It hasn't been an issue.....yet!

  • We've used the same guidelines and have not had problems. We feel (and employees agreed) that to ask them to take from their "bank" for less than 4 hours was not a good plan. Altough we really try to keep our exempt employees to 40 hours weeks, we realize that it just doesn't happen. We felt that the 4 hour period was a good compromise. Perhaps if we had exempt employees regularly working longer hours, then we would consider only reducing for full-day absences. But, on the other hand, we also try to incorporate any regular additional time as part of the negotiated salary, so, when it all washes out at the end of the year, they should still be receiving a comparable salary to hours worked.
  • Thanks for all the input. It looks like the majority agrees that exempt it's OK to dock employees in 1/2 day increments but not in increments less than that. If anyone has any other thoughts, I'd like to read them.

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