Exempt Employees entitlements

My Director recently attended a meeting at which an HR person stated that if an exempt employee has used up all their vacation and PTO and misses a day or two or three (less than a week) that the employer is obligated to pay full salary. According to this HR person, the only way around the event was to have the employee sign a salary reduction agreement. Could this be true? I sure hope not. If it's true, then what is the point of vacation and PTO policy?


  • 3 Comments sorted by Votes Date Added
  • The part about not docking an exempt person's pay is true. If they are out of PTO time and vacation time and miss time, they should be disciplined for an attendance issue.

    I have never heard of having an exempt person sign a salary reduction agreement in a case like this.
  • Under the new FLSA requirements enacted Aug. 23, 2004, you CAN deduct for full-day absences due to personal reasons, sickness or disability without jeopardizing the exempt ee's status (29 CFR ss. 541.602(b)(1), 29 CFR ss. 541.602(b)(2)).

    That being said, however, check to make sure that your state law is in line with the new federal FLSA regs. In Oregon, for example, our state has not yet changed its law to reflect the new federal standard and we must apply that law that is more advantageous to the employee. So, in my case, I cannot take advantage of the new federal provisions.

  • I have never heard of an exempt ee having PTO's. We only track attendance on exempt ee's to check for abuse. The new fed. regs allow docking for full day absences, but you should check into this further at the federal and state level.
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