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elaws - employment laws assistance for workers and small businesses - FLSA Overtime Security Advisor

Compensation Requirements

Vacation and Personal Time Off

In addition to meeting certain duties tests, to qualify for exemption under the Regulations, Part 541, generally an employee must be paid at a rate of not less than $455 per week on a salary basis. As a general rule, if the employee performs any work during the workweek, he or she must be paid the full salary amount. The employee need not be paid for any workweek during which he or she performs no work; for example, when an employee is on vacation for the entire workweek. An employer may not make deductions from an exempt employee's pay for absences caused by the employer or by the operating requirements of the business. If the exempt employee is ready, willing and able to work, deductions from the employee's pay may not be made when no work is available. One exception to this general rule is that an employer may make deductions for full day absences due to personal reasons (other than sickness or disability) of the exempt employee. If an employer offers his or her employees some number of days to be used for personal absences, taking deductions from an exempt employee's accrued leave account to cover an absence subject to the policy (in any amount, including partial days) does not violate the salary basis test. In addition, special rules regarding leave apply to exempt employees of public agencies.

To qualify for exemption, employees generally must meet certain tests regarding their job duties and meet certain compensation requirements. Job titles do not determine exempt status. You should also review the other sections of this Advisor for help in determining whether the employee meets the duties tests for exemption.

Special Rules Applicable to Public Agency Employees

An exempt employee of a public agency may have his or her pay reduced or may be placed on unpaid leave for absences due to personal reasons of less than one full day when leave is not used by the employee because:

  • permission to use leave has not been sought or permission has been sought and denied;
  • the employee's accrued leave has been exhausted; or
  • the employee chooses to use leave without pay;

provided that the employee is paid according to a pay system established by statute, ordinance or regulation or by a policy or practice established pursuant to the principles of public accountability, under which the employee accrues personal leave and sick leave and which requires the public agency employee's pay to be reduced for such absences.

Compensation Requirements

FLSA Overtime Security Advisor Main Menu | Wage and Hour Division