Two questions to ask before docking employee pay
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Two questions to ask before docking employee pay

One of your employees isn’t at work during their scheduled hours. Can you dock pay for employee absences? The answer is maybe. There are two important questions you need to answer before you start subtracting money from an employee’s paycheck.

1) Is the employee an exempt or non-exempt employee?

Hourly employees

Let’s start with the non-exempt employee. In general, if a non-exempt (also called hourly) employee is absent, or misses part of a workday, you are entitled to dock the employee’s pay for the hours missed. But you must do so in line with your own employee attendance policy or the usual practice at your business, and as long as the resulting pay rate does not fall below minimum wage before payroll taxes.

Leave policy consistency counts

Be sure to be consistent with all hourly employees. If you offer paid sick days, and the employee has enough hours to cover the missed time, you can’t refuse to pay those hours if your sick leave policy was followed. If you typically do not dock pay for any employee absence of less than half a day, you cannot vary that practice with only some employees.

Salaried employees

For exempt or salaried employees, the situation is more complicated. Because exempt employees are not covered under minimum wage or overtime rules, they are protected from having pay docked for hours missed from work under most circumstances. Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work.

With few exceptions, an exempt employee must receive the full salary for any workweek in which the employee performs any work, regardless of the number of days or hours worked.

2) Why is the employee absent?

If the employee is salaried or exempt, there are still a few circumstances in which an employee absence or other event will allow you to dock pay.

Permissible Exempt Employee Salary Deductions

  • Exempt employees do not need to be paid for any workweek in which they perform no work.
  • Exempt employees who are absent for a day or more for personal reasons other than sickness or accident. (Note that these deductions must be made only in full-day increments – not for partial-day absences.)
  • Exempt employee absences of a day or more caused by sickness or disability, if the company maintains a plan that provides compensation for loss of salary caused by sickness and disability and the employee exhausted his or her “bank” of leave.
  • Penalties imposed for violation of safety rules of major significance
  • To offset any amounts received by an employee as jury or witness fees or military pay; however, beyond those offsets, deductions may not be made for absences caused by employee jury duty , attendance as a witness or temporary military leave.
  • Unpaid disciplinary suspensions of one or more full days for breaking workplace conduct rules.
  • Partial weeks worked during the initial or final weeks of employment. For example, if Joe resigns in the middle of a workweek, pay him only for the days actually worked in that week.
  • In some cases, when a salaried/exempt employee has worked a reduced or intermittent work schedule under the Family and Medical Leave Act (FMLA). (You can convert a salaried employee to an hourly rate during the time he or she is on intermittent or reduced-workweek FMLA leave without destroying the person’s exempt status.)

Taking the time to learn which employee absences are allowable wage deductions will save you problems down the road, should an exempt employee ever challenge their status and claim overtime, or an hourly employee allege discrimination.


TrackSmart is more than a calendar.  As you work in the software, you're presented with tips and practical advice like you've read here, based on the absences you record.


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