Deductions from an Exempt Employee's Pay

Question: When can we deduct from an exempt employee's pay?

Answer: In general, if an exempt employee performs any work during the workweek, you must pay them their full salary amount. Deductions are allowed, however, for legally required withholding and benefit elections.

There are a handful of other situations in which a deduction from an exempt employee's salary would be permissible under federal law:

• For any workweek in which the employee performs absolutely no work
• In the initial or final week of employment based on the number of hours actually worked
• 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 paid sick leave plan (the Department of Labor has previously found that a plan that offered at least 5 paid days off for sickness qualified as bona fide)
• To offset amounts the employee receives from jury or witness fees or for military pay
• For penalties imposed in good faith for infractions of safety rules of major significance, in accordance with a clearly established workplace policy
• For unpaid disciplinary suspensions of one or more full days imposed in good faith for workplace conduct rule infractions
• For leave taken under the Family and Medical Leave Act