What are the legal and pay issues around unpaid time off, especially for exempt employees? Our internal surveys show that our employees want more time off, and we want to respond—we want to be a “great place to work.” But we just don’t see that we can afford to add paid vacation or personal days. However, we thought we could establish a program of unpaid time, that is, letting people take extra unpaid days along with their paid days off. We want to nail down the pay issues before we proceed. I guess nonexempts would just not get paid, but what about exempts who take a day? Can we dock their pay, and if so, how would we calculate the deduction?
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Here’s a short answer to a long question. Yes, you can deduct from an exempt employee’s pay for a full-day unpaid absence if the employee’s absence is voluntary. To determine the amount to deduct, simply calculate the weekly pay amount and then deduct one-fifth of that amount per day of absence. — Lloyd W. Aubry, Jr.
Lloyd W. Aubry, Jr., Esq., former California labor commissioner, is of counsel at the San Francisco office of law firm Morrison & Foerster.