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Joseph
Joseph, Lawyer
Category: California Employment Law
Satisfied Customers: 5028
Experience:  Extensive experience representing employees and management
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I am an American citizen, exempt, and salaried employee for

Customer Question

I am an American citizen, exempt, and salaried employee for a multi-billion dollar foreign company. I work in California.

If I am at work 8.5 hours, I accrue no overtime. If I am at work for less than 7 hours, 50 minutes, a half-day PTO is removed from my bank. In other words, 10 minutes late costs me half a day PTO.

How can this be legal?
Submitted: 1 year ago.
Category: California Employment Law
Expert:  LawTalk replied 1 year ago.
Good morning,

I'm Doug, and I'm very sorry to hear of your situation.

It appears as though your employer may not be following the law. While deduction from PTO is allowed for a salaried exempt employee who misses time at work during their normally scheduled hours, there are limitations.

In Conley, et. al. v. Pacific Gas & Electric, (2005) the court ruled that while a California employer cannot deduct wages from an exempt employee's paycheck for a partial day absence, the employer may deduct time for a partial day absence from the exempt employee's accrued but unused vacation time or PTO. The holding in Conley only applies to absences in excess of at least four hours. What this means is that California employers may require an exempt employee to use accrued PTO for partial-day absences only when those absences are in excess of four hours in duration. So, it would hold that a deduction from PTO for having missed 10 minutes is impermissible because the missed time is not at least 4 hours. Further, the deduction from PTO for proper instances is a pro rate time---not 4 hours deducted for 10 minutes missed.

For an excellent article on salaried exempt employees and permissible deductions from salary or benefits, I would refer you here: http://www.mckayfund.org/mk-sec/s-cbp/cbp_downloads/FactsheetonPaymentofExemptEmployees.pdf


You may reply back to me using the Continue the Conversation or Reply to Expert link if you have additional questions; and if you do, I ask that you please keep in mind that I do not know what you may already know or with what you need help, unless you tell me.


Please remember to press the smiley faces/stars on the right of your screen when we are finished with our communication so I will be credited for my time in assisting you. Kindly remember to ONLY rate my answer when you are fully satisfied. If you feel the need to rate anything less than OK, please stop and contact me with whatever issue or clarification you may need. I will be happy to continue further and assist you until I am able to address your concerns to your satisfaction.

I wish you the best in 2012,

Doug
Customer: replied 1 year ago.

Thank you for your quick response.


 


The legal opinion you linked (McKayFund.org Re: Exempt Employees and Salary Deductions) was written prior to the Conley, et. al. v. Pacific Gas & Electric, (2005) ruling. The opinion states that in any kind of personal time off from work (including leaving early, etc.), leave may only be reduced if employee is absent a full day.


 


I need a link from the official ruling from the Conley, et. al. v. Pacific Gas & Electric, (2005) case. IF you can draw attention to specific lines or statements that would be helpful to me, especially because nothing I've read so far on the case states that the time spent away from the office has to be at least 4 hours, or that the deduction must be pro rate time.


 


What are the consequences if my pay is reduced for a less than 4 hours leave, with disproportionate PTO deduction (would I lose my exempt status, would my co-workers that report to the same manager lose theirs as well)?


 


Thank you!


 


Expert:  LawTalk replied 1 year ago.
I'm afraid that I cannot assist you. I will opt out and perhaps another expert can assist.

Please do not respond to this message as it will send this question back to me.

Thanks and good luck.

Doug
Customer: replied 1 year ago.
Relist: Incomplete answer.
He provided contradictory advice. Said one thing, sent an outdated legal opinion that contradicted his interpretation of the legal case in question.
Expert:  Joseph replied 1 year ago.
Hello.

Different contributor here. Please permit me to assist.

Unfortunately, the legal opinion that was cited deals with deductions from pay and not from benefits.

However, as an exempt employee, your employer cannot make any partial deductions from your PTO for days in which you work less than 8 hours per day.

"Employers may not reduce exempt employees' salaries or vacation/PTO time for days in which employees do any work.' You should inform your employer that the deductions being made from your PTO are illegal and to stop them from making such deductions in the future.

If they refuse to do so, you can file a complaint with the California Department of Labor, Division of Labor Standards Enforcement.

You can contact them here:

http://www.dir.ca.gov/dlse/districtoffices.htm
Customer: replied 1 year ago.

Thank you s much! Can you link the ruling or DOJ/L site? Also, I believe the PGE ruling was referring to PTO, wasn't it?

Expert:  Joseph replied 1 year ago.
Yes, but the court did reach a different opinion regarding the use of vacation pay for days in which the employees work less than 8 hours:


"We find nothing in California law that precludes employers from following
the federal rule that permits them to require the use of vacation leave for partial-day
absences without causing otherwise exempt employees to become non-exempt under the
salary basis test."
Expert:  Joseph replied 1 year ago.
This answer from the Department of Labor also tends to undercut the argument:

Question: May an employer take deductions from an employee’s leave bank for partial day absences?
Yes. Employers may take partial day deductions from an employee’s leave bank, even if the deduction results in a negative leave balance; however, an employer may not dock an exempt employee’s salary for a partial day absence.

Under the final rules, employers may take deductions from employees' leave accounts for partial day absences, the same as under the old regulations. The preamble specifically states that "employers, without affecting their employees' exempt status, may take deductions from accrued leave accounts...." 69 Fed. Reg. at 22178. The preamble also cites approvingly to a number of Wage and Hour Division opinion letters allowing deductions from accrued leave accounts. Additional opinion letters, dated December 4, 1998, May 27, 1999, and February 16, 2001, similarly provide that employers may reduce the amount of accrued paid leave in an employee's Paid Time Off plan, even if the employee is absent only for a partial day. The employer may reduce the leave so that the employee has a negative leave balance. However, the employee must receive the full guaranteed salary, even if there is no leave in the account or there is a negative balance, if the employee has only a partial day absence.

Joseph, Lawyer
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Experience: Extensive experience representing employees and management
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