The DLSE Agrees That Employers May Deduct Partial Day Absences From Exempt Employees' Accrued Vacation/PTO Banks
Posted by Kendra D. Miller
The DLSE has endorsed the position taken by the California Court of Appeal last year in Conley v. Pacific Gas and Electric Co., 131 Cal. App. 4th 260 (Cal. App. 1st Dist., 2005) that employers may deduct partial-day absences from exempt employees’ accrued vacation/PTO banks for absences of 4 hours or more without jeopardizing their exempt status. The DLSE amended its Enforcement Policies and Interpretations Manual to reflect the Conley decision. See DLSE Enforcement Policies and Interpretations Manual § 51.6.15.4. This is a clear position reversal from that stated in a 2002 opinion letter which suggested that such deductions might jeopardize exemptions under the “salary basis” test and expose employers to significant risks of having to pay overtime to exempt workers.
The DLSE has endorsed the position taken by the California Court of Appeal last year in Conley v. Pacific Gas and Electric Co., 131 Cal. App. 4th 260 (Cal. App. 1st Dist., 2005) that employers may deduct partial-day absences from exempt employees’ accrued vacation/PTO banks for absences of 4 hours or more without jeopardizing their exempt status. The DLSE amended its Enforcement Policies and Interpretations Manual to reflect the Conley decision. See DLSE Enforcement Policies and Interpretations Manual § 51.6.15.4. This is a clear position reversal from that stated in a 2002 opinion letter which suggested that such deductions might jeopardize exemptions under the “salary basis” test and expose employers to significant risks of having to pay overtime to exempt workers.
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