May I make deductions from an exempt employee's salary?

As a general rule, an exempt employee must be paid full salary for any workweek in which they perform any work. Specific rules apply with regard to various deductions from an exempt employee's salary, as follows:

• Deductions from the salary of an exempt employee may not be made due to variations in the quality or quantity of the work performed.
• Deductions may not be made for time when work is not available if the employee is ready, willing and able to work.
• Deductions may be imposed when the employee absents themselves from work for a full day or more for personal reasons (i.e. vacation), other than sickness, accident or disability.
• Deductions may be made for absences of one full day or more occasioned by sickness, accident or disability if deduction is made in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary for sickness, accident, and disability, even if the employee has no time available in their sick pay bank.
• Deductions for disciplinary reasons are not permitted under California law. An employee's salary may be prorated in full day increments for the initial and final weeks of work; and
• Deductions from salary may not be made for partial day or week absences caused by jury, attendance as a witness or temporary military leave.
• Employers may charge an exempt employee's accrued vacation or PTO benefits for a partial day absence provided the employee has enough time available when the absence occurs.
• Employers may charge an exempt employee's sick pay bank for partial day's absence occasioned by illness or injury provided the employee has enough time available when the absence occurs.
• The DLSE believes employers can make hourly deductions from an exempt employee’s leave bank for partial-day absences when such deductions are made in accordance with a bona fide plan, practice or policy providing for such leaves.
• Such deductions should always be made in accordance with the employer’s policy.

Read about Deductions From an Exempt Employee’s Salary in the HR Library.