Q We are considering having exempt employees account for their time off in increments of one hour. Is there a specific law that requires exempt employees to take paid time off (PTO) in increments of either four hours (half a day) or eight hours (a full day)?
A The key issue is that your question is about paid time off. As you are likely aware, exempt employees must be paid on a salary basis, which means they receive a predetermined amount of compensation each week regardless of how many hours they work. There are exceptions when an exempt employee misses a full day of work for personal reasons not related to injury or illness and when an employer has a bona fide policy of paying for time missed due to illness or disability. I’m inferring from your question that you have such a policy, but remember, even if you do, you can make deductions from an exempt employee’s salary for time missed in excess of his allotted sick leave only for full days missed. If the employee has a partial-day absence, you may not deduct any amount from her weekly salary for the absence.
But your question isn’t about reducing an exempt employee’s salary; it’s about accounting for why the salary is paid—i.e., for time worked or for PTO. There’s no restriction on deductions from an exempt employee’s accumulated leave or PTO account because any missed work is being offset by her PTO and her actual weekly salary therefore isn’t affected. There’s also no restriction on requiring exempt employees to account for missed work in one-hour increments if you need the information to administer your PTO policy. There is a general rule that exempt employees may not be treated as nonexempt and still keep their exempt status (e.g., requiring salaried employees to clock in and clock out can be seen as defeating their exempt status). But that doesn’t appear to be what you are proposing.
Under the circumstances, requiring exempt employees to take time off in one-hour increments shouldn’t run afoul of federal wage and hour law. Remember, however, that if a salaried employee has insufficient PTO to cover missed work, you may not reduce her salary in any way other than full-day increments under the personal absence or bona fide sick leave exceptions described above. You may discipline her for violating your leave policy, but you may not reduce her salary.
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