The Fair Labor Standards Act (FLSA) can cause a lot of difficulties for employers.  Thankfully, once you have successfully determined whether each of your employees is exempt or non-exempt, you are done, right?  Unfortunately not.

Under the FLSA, you cannot base the amount of money you pay your salaried employees on the number of days or hours he or she works.  In other words, you generally cannot deduct money from an exempt employee’s paycheck for time off work.  But, surprise, surprise, there are exceptions to the general rule…

You are permitted to dock an exempt employee’s pay:

  1. for a week when the employee does not perform any work

  2. for a day or days that the employee is absent for reasons other than sickness or accident

  3. for time missed as a penalty for violating a major safety rule

  4. to offset money received by the employee for acting as a juror or witness, or for military pay (deductions may not be greater than the amount received by the employee)

  5. for time missed while on disciplinary suspension for breaking workplace conduct rules

  6. for partial weeks worked at the very beginning or end of an employee’s tenure

  7. where the employee is taking intermittent FMLA leave and has exhausted all paid leave

Docking an exempt employee’s pay is almost sure to lead to questions and, sometimes, anger.  No one likes a smaller paycheck and you should be prepared for the (almost) inevitable threats of a lawsuit.  It is always helpful to have an explanation ready to go, but you should also be prepared if you are sued.  And, of course, if your employee should choose to sue you, make sure you do not take any negative actions against them that could be construed as retaliation.

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