Pay Deductions for Unapproved Leave

Two common misconceptions are that employees can use leave in any way and at any time they choose and that the Fair Labor Standards Act (FLSA) prevents an employer from docking pay for exempt employees.

A recent HRX article discusses how districts can, and often do, place limitations on state personal discretionary leave, but what can be done if an employee takes discretionary leave on a day that is not allowed or doesn’t follow established procedures for requesting leave in advance?

Dispelling FLSA Limitations

One of the hallmarks of FLSA exemption status is receiv­ing a salary. A salary is defined by the FLSA as an amount received each pay period, and that amount is not subject to reduction due to variations in the quality or quantity of work done (29 C.F.R §541.602). Consequently, employers are appropriately cautious about taking any action that the DOL could construe as corruption of the salary basis of pay.

However, public sector employers retain the option of making partial-day deductions for absences from an exempt employee’s salary if the employer has a policy or practice of making such deductions for reasons of public accountability (29 C.F.R. §541.710).

An employer may make partial-day deductions or “dock” the employee’s salary if accrued leave was not used because:

• Permission for leave was not requested
• Permission for leave was requested and denied
• Accrued leave was exhausted
• The employee chose to use leave without pay

Communicating Leave Procedures

Prevention is key to eliminating issues. The best method for preventing these absences is clear and frequent communication of leave procedures with employees. One approach is to address the issue in administrative regulations and procedures. Sample language similar to “Any unapproved scheduled absence for which the employee did not obtain approval from an authorized supervisor, or absences beyond accumulated and available paid leave, shall result in deductions from the employee’s pay” can be added to the employee handbook and other communications regarding leave.