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Your Legal Corner - Client Alert Blog

Employers May Deduct Accrued Vacation and/or Sick Leave for Partial Day Absences

Written By: Melissa C. Marsh, Esq., California Attorney, February 2010 Add to Favorites
On November 23, 2009, the California Department of Industrial Relations' Division of Labor Standards Enforcement (DLSE) issued an opinion letter on whether an employer may deduct vacation and sick leave time when an exempt employee is absent for either a partial day, or an entire day. According to opinion letter number 2009.11.23, a California employer may deduct accrued vacation and/or sick leave time (accrued personal time off) for a salaried employee's partial-day absence so long as the deduction is consistent with the employer's express written policies (e.g., employee handbook or manual). This opinion conforms to the opinion provided by the Department of Labor,
"Where an employer has a bona fide 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 exempt employee is absent from work, whether the absence is a partial or full day, without affecting the salary basis of payment, if the employee nevertheless receives payment of his or her guaranteed salary. Where the employee's absence is for less than a full day, 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."
(DOL Opinion Letter FLSA2006-32 (September 14, 2006), emphasis added; see also DOL Opinion Letter FLSA2005-7 (January 7, 2005).)

According to the DSLE, while a California employer may require exempt salaried employees to use accrued vacation time, sick leave, and/or paid time off for partial-day absences if expressly set forth in their written employee policies, the employer is prohibited from docking the pay of an exempt salaried employee for a partial-day absence. See, Abshire v. County of Kern, 908 F.2d 483, cert denied, 498 U.S. 1068 (1991) [deducting an employee's salary for absences less than one day violates FLSA salary basis test]; Conley v. P.G.& E., 131 Cal.App.4th 260, 267 (2005); DOL Opinion Letter FLSA2007-6 (February 8, 2007) [partial day absences not expressly recognized by Part 541 regulations may render an employee's compensation not on a salary basis, thereby jeopardizing exempt status].)

To see how this opinion plays out under specific scenarios, please see the DLSE Opinion Letter Number 2009.11.23.

Although the courts are not required to follow the advice set forth in DLSE opinion letters, the courts often find DLSE opinion letters persuasive when interpreting California law.

Tags: partial day absence, partial day off
Posted In: Employment Law News 

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Located in Los Angeles, California, the Law Office of Melissa C. Marsh handles business law and corporation law matters as a lawyer for clients throughout Los Angeles including Burbank, Sherman Oaks, Studio City, Valley Village, North Hollywood, Woodland Hills, Hollywood, West LA as well as Riverside County, San Fernando, Ventura County, and Santa Clarita. Attorney Melissa C. Marsh has considerable experience handling business matters both nationally and internationally. We routinely assist our clients with incorporation, forming a California corporation, forming a California llc, partnership, annual minutes, shareholder meetings, director meetings, getting a taxpayer ID number (EIN), buying a business, selling a business, commercial lease review, employee disputes, independent contractors, construction, and personal matters such as preparing a will, living trust, power of attorney, health care directive, and more.