Is it permissible to require exempt employees to use accrued vacation or sick leave when they are absent?

A. Yes, the Ninth Circuit Court of Appeals has decided that deductions from leave banks for absences are permitted since the words "amount" and "compensation" in the regulations refers to "cash" or "salary." Therefore, as long as the employee receives the appropriate payment in cash or salary, deductions from leave banks do not affect the exempt employee´s status.

However, it is essential that the exempt employee´s salary is not "subject to deductions" for partial day absences. Therefore, employers should adopt policies clearly stating that the salary will not be reduced for absences of less than a full day, if the employee has no available accrued leave to access. More.

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