Permitted Salary Reductions to Exempt Employees’ Salaries

Employers generally cannot change exempt employees’ compensation because of absences from work. However, employers can reduce pay without jeopardizing employees’ exempt status if absences of a full day or more due to:

  • Personal reasons
  • Illness or accidents if employees are covered under sick or disability pay policies
  • Unpaid leave taken pursuant to FMLA act
  • Violations of significant safety rules that seriously endanger workplace safety or other employees’ welfare
  • Employers can suspend employees without pay for 1 or more days if suspensions are imposed under written policies applicable to all employees.

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