labor lawAdivision of labor law center

The California Division of Labor Standards Enforcement or DLSE recently issued an opinion that would permit employers to deduct vacation and sick leave for an exempt employee’s absence of less than 4 hours, as long as the deduction is consistent with the employer’s written policies.

 

In addition, the letter permits a California employer to deduct a combination of paid sick leave and vacation for a partial-day absence.

 

This opinion letter does not have the force of law, and employers should wait to implement this policy until the California courts have ruled on the change in regulations.

 

This opinion letter represents a major change in California policy. In California, as in other states, an exempt employee who works part of the day is entitled to payment for the entire day. However, the issue was how that payment would be tabulated. The state has long held that an exempt employee who worked a partial day could not have sick or vacation time of less than 4 hours deducted from the employee’s balance. That policy was in opposition to federal law as interpreted by courts in most areas of the country.

 

Suppose Susan is an exempt employee who normally works 8 hours per day. One Tuesday, Susan works 6 hours and goes home early with the flu. In the past, a California employer would have to pay Susan for the entire day, and could not deduct 2 hours of sick leave or vacation from Susan’s balances. That has now changed.

 

In the past, California exempt employees were required to use sick leave and vacation in segments  of 4 hours or full days. Now, an employer can count sick leave and vacation time in one-hour increments, if that is consistent with company policy.

 

In one example cited by the DLSE, an exempt employee was absent from work for a full 8-hour day. The employee had 5 hours of accrued sick leave and 2 hours of accrued vacation. Under the current guidelines, the employer could deduct 5 hours of sick leave and 2 hours of vacation from the employee’s balances. (However, the exempt employee is still entitled to payment for the full day, so the employer would essentially be paying for 1 unworked hour.)

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1. Posted by: Kristin

   Hi, so is this law retroactive? Meaning: I have learned from reading this site that it was unlawful here in california for my employer to make me deduct from my vacation time in 2 hour increments (in 2008-2009). I am in the process of bringing this to her attention. Should I give up now?

2. Posted by: Amelia

   Hi Kristin! Yes, you should probably give up now. The opinion letter from the DLSE says that in thier best opinion, such deductions have been lawful since 2007 or before. You can certainly contact the California DLSE and file a complaint, but if they don’t support you, the matter should be dropped. HTH, and thanks for reading the blogs!~ Amelia