Payment Criteria

• In general, the salary of an exempt employee is not based on hours or days worked, but rather on a fixed amount each payday. The employee receives full salary at all times, except when a permissible deduction under federal or state law exists. The minimum salary requirement for exempt salaried employees is $455 per week as of 2011; state law may require a higher minimum payment. For example, in California, such employees must receive no less than twice the state minimum wage as of 2011.
  
  

Federal Exceptions

• Under the FLSA, as an employer, you may deduct an exempt employee’s pay for unpaid time off in certain cases. If she does not work during a particular week, she’s not entitled to pay for that week. If she breaks a workplace conduct rule, she may be subject to unpaid disciplinary suspensions of one or more full days. If she takes unpaid leave under the Family Medical Leave Act, you do not have to pay her for the days taken. If she takes benefit days, such as vacation, sick or personal time but has exhausted her available time, you do not have to pay her for the excess days taken. Further, if she does not work the entire first and last week of her employment, you may pay her only for the days worked during the pay period.
  
  

State Exceptions

• Some states adhere strictly to FLSA-exempt standards, including provisions for unpaid time off. Some states follow the FLSA to a point and include their own standards. For example, in Texas, an employer may deduct a full day’s salary if an employee is absent for personal reasons that are not medically related and if the employee consents to the deduction in writing. If the reason is due to a medical condition and the employer does not have an established policy for paid leave relating to such absences, the employer cannot make the deduction even if the employee gives written consent. Contact your state labor department if you need clarification on what constitutes unpaid time off for exempt employees.
  
  

Time Off Calculation

• When subtracting for unpaid time off from an exempt employee’s salary, make the deduction in full day increments only. Specifically, exempt employees usually receive a full day’s pay when they take a partial day-off. Therefore, if the employee takes three and a half unpaid days off, deduct for three days only.