Can you deduct sick days from an exempt employee’s salary? This topic has always been confusing. The regulations for the Fair Labor Standards Act (FLSA) state “deductions may be made for absences of a day or more occasioned by sickness or disability if the deduction is made in accordance with a bona fide plan, policy or practice of providing compensation for loss of salary occasioned by both sickness and disability.” The regulations go on to state “if the employer’s particular plan, policy, or practice provides compensation for such absences, deductions for absences of a day or longer because of sickness or disability may be made before an employee has qualified under such plan, policy, or practice and after he has exhausted his leave allowance thereunder.” The question then becomes what constitutes a bona fide sick leave policy?
The U.S. Department of Labor has clarified this question somewhat by providing answers to some questions posed by MRA:
