May employers require exempt employees to use PTO for half-day absences?
‘Tis the season for time off. Complying with wage and hour laws can be tricky, but especially at this time of year, when many employees are coming and going, whether due to vacations, holidays, or illnesses.
Tracking nonexempt employees’ hours is pretty straightforward. However, employers should know that they may require exempt employees to use paid time off (PTO) for absences of less than a full day, but doing so depends on several factors.
Under the federal Fair Labor Standards Act (FLSA), employers must pay exempt employees their full salary for each week they perform any work. If they don’t, employers risk an FLSA violation, and those employees could lose their exemption.
Employers may deduct from exempt employees’ accrued paid time off (PTO) leave bank for partial-day absences. This, essentially, requires exempt employees to use their PTO for absences of less than a day. Employers must, however, be careful.
Where employers have a benefits plan (e.g., vacation time, sick leave), they may reduce the accrued leave for the time an employee is absent from work, whether the absence is a partial day or a full day, without affecting the employee’s exemption, as long as the employee receives their guaranteed weekly salary.
This is true even if the employee has no accrued benefits in the leave plan and the account has a negative balance.
Full-day absences
If employees are absent for 1 or more full days for personal reasons (e.g., car repair), other than sickness or disability, employers may deduct from their salary, as opposed to their PTO bank.
If, for example, an exempt employee is absent for 2 full days to move to a new house, the employer may deduct from the employee’s weekly salary for the 2 days. If, however, the employee is absent for 1.5 days, the employer may deduct from the employee’s salary only for the 1 full-day absence. The employer may deduct from the employee’s PTO bank for the partial-day absence.
While employers don’t have to have a bona fide sick leave plan, they may make such deductions due to absences related to sickness or disability only if they have one. Employers must communicate the plan to eligible employees and follow the plan.
To be bona fide, employers must administer the plan impartially, and its design shouldn’t reflect an effort to evade the salary-basis requirement.
Whether a particular plan is bona fide would be based upon the actual design of and practices applicable under the plan. A PTO plan might qualify as bona fide even though it’s not exclusively for use during sickness or disability.
Assuming that a bona fide plan exists, employers may make deductions from an employee’s salary for absences of 1 or more full days because of sickness or disability before the employee has qualified under the plan and after the employee has exhausted their PTO/sick leave.
Key to remember: Employers may deduct from exempt employees’ PTO bank for partial-day absences.

















































