Wage Claims Article

Allowable Deductions for Exempt Employees

Background:  The Fair Labor Standards Act (the FLSA) contains rules regarding overtime, including which job positions are non-exempt versus exempt, and it dictates that employees in non-exempt job positions receive overtime pay.  In contrast, the FLSA does not require employers to pay overtime to employees in exempt job positions regardless of how many hours they work.  The FLSA lists factors that indicate whether a job should be treated as exempt from overtime or as non-exempt (which require overtime pay for extended work hours).  This article is written for exempt employees and more particularly this article focuses on the circumstances that would permit your employer to reduce (“dock”) your compensation when you miss work. 

The Basic Rule:  The starting point is that an exempt employee’s salary in any week in which he or she performs any work duties at all cannot be reduced by the time not worked so long as the employee was ready, willing and able to work.   For example, if you, an exempt employee, are ready to work but inclement weather shuts down roads and shutters your building for some portion of your workweek, you must be paid your full week’s salary.   The basic rule is that if you worked any part of a week and are kept from work for some portion of it through no fault of your own, then you must be paid as if you had worked the full week.

Exceptions to the Basic Rule:  The old platitude that rules are meant to be broken holds true here.  There are seven rule breakers that allow your employer to reduce your (an exempt employee’s) weekly salary. 
  1. If you, an exempt employee, are absent from work for one or more full days for personal reasons (other than sickness or disability, which are addressed below), your salary that week may be reduced in full day increments.  If you work any part of a day, you must be paid for the full day.
  2. If you are absent from work for one or more full days due to sickness or disability, your salary for the week in which those absences fell may be reduced but only if the company provides wage replacement benefits for these types of absences under a bona fide plan, policy or practice.
  3. In weeks where you take unpaid leave pursuant to the Family Medical Leave Act, your compensation will be reduced pursuant to the FMLA policy in place for all employees, which may mean your salary could be reduced in less than full day increments.
  4. If you miss work to report for jury duty, to serve as a witness or to perform military service, your weekly salary may be reduced by the amount of any payment you received from your service. 
  5. Your weekly salary may be reduced by the amount of any penalty imposed in good faith against you for violating safety rules of major significance.
  6.  If you have an unpaid suspension imposed in good faith against you for violations of written workplace conduct rules, your weekly salary may be reduced in line with the duration of the suspension.
  7.  If your first and final week of work are not full weeks, your compensation may be reduced accordingly.

As a reminder, the above exceptions are for absences other than those lasting a full workweek.  The law does not require employers to pay exempt employees for full-week absences.

Who To Turn To For Help:  The FLSA rules limiting the circumstances in which an exempt employee’s salary may be reduced due to an absence are fairly complex.  Inadvertent errors are certain to occur.  If you think that your salary may have been docked where the law precludes it, you may want to talk with an attorney knowledgeable about wage and hour laws.  Another option available to you if you have questions about the wage and hour laws and your rights under those laws is to call the Wage and Hour Division of the Department of Labor.  The telephone number for the DOL office in Arizona is 1-602-514-7100, or call the agency’s toll-free help line at 1-866-487-9243.    

Contributing Attorney Writer: Shirley Kaufman is an attorney at Faulkner Law Offices, PLLC where she focuses on employment law.



  • My employee quit without giving required two weeks notice. In contract that he signed, it says specifically that if he quits without notice, I as an employer have a right to deduct from his final paycheck any costs incurred by his resignation. Employee agreed to this and signed the contract, but now he demands full payment. Can I reduce his pay? I had to cover his work by hiring a replacement
  • I was hired to work 8:30am to 5pm at a daycare and when i get there if there is not enough kids they will make me wait to start my shift until there are enough kids or work to do, the hours i am waiting are not being paid. I have also got in trouble for leaving the building if i am told i cant start yet. They want me to sit there and wait unpaid for sometimes up to 3 hours. I have brought this up to my manager but i feel they are taking advantage of my age because i am only 19
  • My employer provides hand written payroll checks every 2 weeks, however has never provided me with a paystub. In reading statutes, I was only able to find specific language regarding wage statements being required for electronic deposits. Annual statements are provided, however I have found discrepancies on these statements (amounts not matching checks received, pay dates missing from statements, pay dates listed on statement that weren't actually pay dates, incorrect taxes withheld). I have requested regular pay stubs, but they will not provide them. What can I do?
  • I am considered an employee, receiving pay for piece work completed. Is my employer required to pay me weekly, monthly or what? Where can I find more information on piece work/employee status?
  • Does an employer have to pay accrued sick and personal/vacation time to an employee that has given a resignation?
  • What are the laws regarding overtime pay? when is an employer exempt from paying overtime?
  • is it legal for my boss to deduct my pay due to mistakes made by his employees on jobs we recently have been doing, and has he broke the law and which law?
  • My employer makes us waitresses pay three dollars per day in cash to him for a portion of the carpet cleaning he pays for. Is that legal?
  • If I feel I earned more than I was paid, is there a government organization I can call to confirm that?
  • My paycheck bounced and when I inquired about it, I was terminated. I am now owed payment for 150 + hours. What are my options?





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