Taking Half Days

appliedfinish · October 2007

How does taking half days work for Exempt employees? Do we still dock thier PTO for 4 hours?

Thanks,

GoPatsNH · October 2007

you can't dock their pay for half days, but you can deduct from their pto bank as long as your policy states that you can deduct for less than full day increments

dhall111 · October 2007

Our employees track all time worked. For any time not at work they must record PTO. So yes, we would pay those 4 hours out of their PTO bank.

srallen · October 2007

We allow our exempt employees to take either whole days or half days of vacation - so we would dock that for a half day off.

LadyAnn · October 2007

Depends on your company policy. For exempt employees, we only dock for hours under 80 in a pay period (2 weeks). So I may take off 4 hours today, but at the end of the pay period I've worked 79 hours, I only have 1 hour docked. If I were to have worked 80 or more hours, I wouldn't have any docked.

TXHRGuy · November 2007

There is significant case law related to partial day deductions from leave banks opening the doors to salary basis challenges. It's generally a bad idea although I know many companies engage in this practice. Personally, I think it's playing with fire. If your exempt employees are not working full days, that's more of an attendance/disciplinary issue than a payroll issue.

HRforME · November 2007

Well, the DOL doesn't think you are playing with fire.... I do know there has been some case law in specific states (such as California) that seems to go back and forth on whether this goes against state law, but it is NOT against the FLSA.

Directly from a DOL opinion letter: http://www.dol.gov/esa/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.pdf

"...To respond to your specific concern about whether or not an exempt employee’s accrued PTO leave bank may be reduced for partial day absences, the answer is yes. Where an employer has a benefits plan (e.g., vacation time, sick leave), it is permissible to substitute or reduce the accrued leave in the plan for the time an employee is absent from work, whether the absence is a partial day or a full day, without affecting the salary basis of payment, if the employee nevertheless receives in payment his or her guaranteed salary. Payment of the employee’s guaranteed salary must be made, even if an employee has no accrued benefits in the leave plan and the account has a negative balance, where the employee’s absence is for less than a full day. See opinion letters dated February 16, 2001, May 27, 1999; and December 4, 1998 (enclosed)...."

TXHRGuy · November 2007

[quote user="HRforME"] Well, the DOL doesn't think you are playing with fire.... I do know there has been some case law in specific states (such as California) that seems to go back and forth on whether this goes against state law, but it is NOT against the FLSA.

Directly from a DOL opinion letter: http://www.dol.gov/esa/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.pdf

"...To respond to your specific concern about whether or not an exempt employee’s accrued PTO leave bank may be reduced for partial day absences, the answer is yes. Where an employer has a benefits plan (e.g., vacation time, sick leave), it is permissible to substitute or reduce the accrued leave in the plan for the time an employee is absent from work, whether the absence is a partial day or a full day, without affecting the salary basis of payment, if the employee nevertheless receives in payment his or her guaranteed salary. Payment of the employee’s guaranteed salary must be made, even if an employee has no accrued benefits in the leave plan and the account has a negative balance, where the employee’s absence is for less than a full day. See opinion letters dated February 16, 2001, May 27, 1999; and December 4, 1998 (enclosed)...."[/quote]

OK OK, you're absolutely right.

I could swear there were white papers about problems with partial day deductions from leave banks on the SHRM website but, if there were, they aren't there now.

Here's a html version of the same letter:

http://www.dol.gov/esa/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.htm

TXHRGuy · November 2007

A 2006 legal report from a certain professional website has this quote on it:

Provisions of the new regulations and comments in the preamble support two generally accepted propositions concerning additional compensation:
• That an employer generally may give exempt employees additional compensation over and above their salary—even if the extra is paid on an hourly basis—without jeopardizing the employee’s salaried status.
• That an employer may deduct from exempt employees’ vacation, paid time off or benefit time on an hour-for-hour basis.
While these two propositions have now been fully endorsed by the DOL (and by the courts as to payments in addition to salary), some courts have been reluctant to accept hour-for-hour deductions, and it remains to be seen whether they change their views in light of the DOL’s recent pronouncements

Another paper, from 2006, says this on the topic of partial day deductions from leave banks:

Of course, federal courts are not required to follow DOL opinion letters, cautions McCutchen. Thus, employers in jurisdictions where a federal court has not followed the DOL position on this issue are best advised to follow the court decisions.

Although the other white papers are gone, it does not seem that the matter is entirely sorted. I would check with counsel to see how the local circuit thinks about this matter.

Taking Half Days

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