If a salaried exempt employee takes a day off, using their PTO, do we only pay them for 32 hours that week?

No, you must pay the employee for a full 40 hours for the week. It’s called Paid Time Off (PTO) because the employee is paid for the time that they’ve taken off. You can deduct 8 hours from their PTO balance, but the total pay remains the same. If you’re a Zenefits customer, you can […]

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No, you must pay the employee for a full 40 hours for the week. It’s called Paid Time Off (PTO) because the employee is paid for the time that they’ve taken off. You can deduct 8 hours from their PTO balance, but the total pay remains the same. If you’re a Zenefits customer, you can use the free PTO product to track employee time off.

Only specific situations will allow you to dock a salaried employee’s pay for taking hours or even a partial work week off. A key defining point to salaried positions, as defined by the FLSA Fair Labor Standards Act , is that they’re paid the same amount from one pay period to the next without reductions for variations in the quality or quantity of the work performed. This means that typically deductions for taking a day off aren’t allowed.

Exempt Salaried with PTO

If an exempt, salaried employee has PTO as part of their benefits package, generally you can require them to use it to cover their absences. This doesn’t impact their exempt status because, though it costs some PTO hours, it won’t change their total monetary compensation.

However, in a few instances courts have ruled that this practice essentially treats the exempt worker like a non-exempt wage worker, so be sure to check your state’s laws before adopting this practice.

Deductions of pay are permissible under FLSA regulations if your exempt, salaried employees have exhausted their PTO benefits. Of course this should be stated clearly in the employment contract and employee handbook. Deductions are also permissible for personal time taken off, provided it doesn’t involve sickness or disability leave.

Summary

If your salaried employee uses PTO to cover an absence, their pay for that period shouldn’t change.

Helpful Links:

Time off requests for exempt vs. non-exempt – Blogging for Jobs

Wage and Hour Division – DOL.gov

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