If a salaried exempt employee takes a day off, using their PTO, do we only pay them for 32 hours that week?

October 23, 2023
If a salaried exempt employee takes a day off, using their PTO, do we only pay them for 32 hours that week?

The answer is no. You must pay the employee for a full 40 hours for the week. It’s called paid time off (PTO) because the employee is paid for the time that they’ve taken off. You might deduct 8 hours from their PTO balance, but the total pay remains the same.

If you’re a TriNet customer, you can use our time and attendance services to track employee hours and PTO for salaried employees as well as hourly workers. Let’s dive deeper into PTO policy for employers wondering, “how does PTO work for salaried employees?”

If your salaried employee uses PTO to cover an absence, their pay for that period shouldn’t change. Only specific situations will allow you to dock a salaried employee’s pay for taking hours or even a partial work week off. A key defining point to salaried positions, also referred to as exempt employees, is that they’re paid the same amount from 1 pay period to the next without reductions for variations in the quality or quantity of the work performed, according to the Fair Labor Standards Act (FLSA). This means that typically deductions for taking a day off aren’t allowed.

Labor laws, salaried employees and PTO

If an exempt employee has PTO as part of their benefits package, generally you can require them to use it to cover their absences. This doesn’t impact their exempt status nor their pay for that week, although it will cost them some PTO hours.

However, in a few instances courts have ruled that this practice essentially treats the exempt worker like a non-exempt wage worker, so be sure to check your state’s laws before adopting this practice.

What happens when a salaried employee runs out of PTO? Deductions of pay are permissible under FLSA regulations if your exempt, salaried employees have exhausted their PTO benefits. Of course, this should be stated clearly in the employment contract and employee handbook.

State paid leave and salary PTO laws

Each state has its own set of paid leave laws. In some instances, vacation time and paid sick leave are considered separate. Other states combine all paid leave under the same umbrella. In those cases it applies whether an employee takes a vacation day, personal leave, or asks for sick leave. For example, in Maine, employees can use their paid vacation time for any reason at all.

Most local regulations apply to hourly employees, often working minimum wage, and paid time off is accrued based on hours worked. The maximum accrued vacation time earned per year differs from state to state.

PTO policy for salaried employees

Federal law does not guarantee paid family or medical leave, but many employers offer paid time off for vacations, illnesses and personal time. Businesses find that personal days, sick time and other PTO greatly increase employee satisfaction. It's a valuable tool in recruiting talent and it also can improve productivity by improving the overall wellness of individual employees and by keeping sick people from coming into work and infecting others.

It’s important to establish a clear PTO policy. Include your PTO policy in your employee handbook and update it regularly. Your rules for salaried employees and PTO may differ from those for hourly employees, so you might want to have separate handbooks for them. You may also want to review each employee’s nonexempt or exempt status before signing off on PTO.

Clear communication about a salaried employee’s remaining PTO can help eliminate tension in the workplace. It can also help ensure that workers use this benefit sensibly. As an employee uses up their paid leave, it can be helpful to remind them that further time off might require unpaid leave.

If a salaried employee is struggling with coming into the office, it’s possible to keep their salary and hours the same without resorting to PTO and unpaid time off. Instead, an employer can offer hybrid or remote work options. This can be extremely beneficial for an exempt or nonexempt employee who uses a lot of sick leave due to being the primary caregiver for a family member or someone dealing with a chronic illness.


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