The California Division of Labor Standards Enforcement (”DLSE”) has issued an opinion letter stating that while employers cannot deduct from the salary of an exempt employee for partial day absences, employers may deduct for such absences from employee leave balances in accordance with the employer’s bona fide leave policies. The DLSE specifically repudiated its prior limitation on leave bank deductions to partial day absences of four or more hours. This opinion represents a significant break from the DLSE’s prior enforcement position and likely will give California employers and employees greater flexibility in scheduling paid time off. The opinion letter also provides a useful overview of the “salary basis test” for exempt employees. Click here for a copy of the DLSE opinion letter.
As the opinion letter makes clear, unlawful deductions from employee wages remains a complicated area. Contact Instant HR Solutions for guidance on lawful state and federal payroll deductions to ensure you’re in compliance.
