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Wage and Hour

Question: Is it correct for exempt employees to take time off work – maybe 2-3-4 hours in a day and not have it charged against their annual balance?  Our company pays for their time off but our CFO just recently said exempt employees are not to have the above-noted time taken off their annual leave balance.





If exempt employees take time off during the day, it is allowable to require them to charge that time to their annual leave.  The Fair Labor Standards Act does not care if the time is taken from vacation, sick, personal or a paid time off bank, just as long as they are paid.  To do this, however, you must have a paid time off plan (whether it is a vacation, sick or other plan) that is communicated to employees.

In the case where an exempt employee has used all of his/her time off allotment and works a partial day, the exempt employee must be paid for the entire day.  On the other hand, if the same employee misses an entire day, it is allowable to not pay them for that time missed.

Just a word of caution – in many cases, exempt employees work over 40 hours in a week and do not get extra compensation for doing so.  Therefore, strictly enforcing a rule whereby an exempt employee must account for all of their time off can create a morale problem.

Not knowing your work environment, it is hard to come up with a recommendation, but some flexibility to allow an exempt employee to take an hour or two here or there to attend to personal or other matters without charging it to their annual leave should be built in.   Usually, we put a system in place whereby exempt employees must account for 4 hours or more of absence in a day.

I hope this helps.  Call me if I can be of further assistance.

Thanks for Asking Bob

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