FLSA2018-14 — Calculation of salary deductions and section 13(a)(1) salary basis

U.S. Department of Labor Wage and Hour Division
Washington, D.C. 20210

FLSA2018-14
January 5, 2018
Dear Name*:
This letter responds to your request that the Wage and Hour Division (“WHD”) reissue Opinion
Letter FLSA2009-33. On January 16, 2009, then-Acting WHD Administrator Alexander J.
Passantino signed the opinion letter as an official statement of WHD policy. On March 2, 2009,
however, WHD withdrew the opinion letter “for further consideration” and stated that it would
“provide a further response in the near future.”
We have further analyzed Opinion Letter FLSA2009-33. From today forward, this letter, which
is designated FLSA2018-14 and reproduces below the verbatim text of Opinion Letter
FLSA2009-33, is an official statement of WHD policy and an official ruling for purposes of the
Portal-to-Portal Act, 29 U.S.C. § 259.
I thank you for your inquiry.

Bryan L. Jarrett
Acting Administrator

Dear Name*:
This is in response to your letter inquiring whether certain salary deductions are permissible for
employees exempt under Fair Labor Standards Act (FLSA) section 13(a)(1)
∗
and the appropriate
ways to calculate salary deductions for exempt employees. It is our conclusion that the proposed
salary deductions are permissible.
You pose three questions relating to salary deductions under the salary-basis rules set forth in 29
C.F.R. Part 541. Your first question is whether a salary deduction is permissible when an
exempt employee is absent for a full day, but does not have enough leave time in his or her leave
bank to cover the entire absence. Your second and third questions relate to full day absences for

∗
Unless otherwise noted, any statutes, regulations, opinion letters, or other interpretive material cited in this letter
can be found at www.wagehour.dol.gov.

days on which an employee is scheduled to work fewer or greater than eight hours and whether
deductions for such absences may be made using an hourly equivalent. We assume from the
facts presented in your letter that the full day absences are either for personal reasons or for
illness or disability and that your client has a “bona fide plan, policy or practice of providing
compensation for loss of salary occasioned by such sickness or disability.” We further assume
that the employees are employed in a bona-fide executive, administrative, or professional
capacity, as those terms are defined in the regulations, 29 C.F.R. Part 541, and fulfill the
requirements for the section 13(a)(1) exemption.
An employee will be considered to be paid on a salary basis if he or she “regularly receives each
pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of
the employee’s compensation, which amount is not subject to reduction because of variations in
the quality or quantity of the work performed.” 29 C.F.R. § 541.602(a). Deductions may be
made, however, when the employee is absent from work for one or more full days for personal
reasons, other than sickness or disability. 29 C.F.R. § 541.602(b)(1). Thus, if an employee is
absent for two full days to handle personal affairs, the employee’s salaried status will not be
affected if deductions are made from the salary for two full-day absences. Id. If an exempt
employee is absent for one and one-half days for personal reasons, however, the employer may
deduct only for the one full-day absence. Id.
Deductions from salary may also be made for absences of one or more full days occasioned by
sickness or disability (including work-related accidents), if the deductions are made “in
accordance with a bona fide plan, policy or practice of providing compensation for loss of salary
occasioned by such sickness or disability.” 29 C.F.R. § 541.602(b)(2). Thus, if the employer’s
particular plan provides compensation for such absences, deductions for absences of one or more
full days because of sickness or disability “may be made before the employee has qualified under
the plan, policy or practice, and after the employee has exhausted the leave allowance
thereunder.” Id.
Deductions from an employee’s guaranteed salary for absences may only be taken under section
541.602(a) if the employee misses one or more full days of work. Id. The regulations do not
permit salary deductions for partial day absences. If the absence is for one full day, however, the
regulations do not prohibit a deduction equivalent to a partial day salary. See Wage and Hour
Opinion Letter May 27, 1999 (copy enclosed). The regulations only prohibit deductions from an
employee’s guaranteed salary for absences that are less than one full day in duration. In other
words, if the absence is one full day in duration, the employer may deduct one full day’s pay or
less. Therefore, in answer to your first question, if an employee is absent for one or more full
days, but does not have enough time in his or her leave bank to cover the entire absence, the
employer may make a deduction from the employee’s pay for any portion of the full-day
absences that is not accounted for by the leave bank.
You also ask whether an employer may calculate the permissible deduction using the hourly
equivalent of the time missed by the employee if the day of the absences is a day on which the
employee is scheduled to work fewer or greater than eight hours. The regulations provide that
when taking a permissible deduction under 29 C.F.R. § 541.602(b), an “employer may use the
hourly or daily equivalent of the employee’s full weekly salary or any other amount proportional
to the time actually missed by the employee.” 29 C.F.R. § 541.602(c). Therefore, if an

employee is absent from a shift scheduled to be shorter or longer than the employee’s regular
shift, the employer may take a deduction in proportion to the number of hours missed. Again,
however, you should note that deductions are not permissible if the employee is absent for less
than one full day of work.
This opinion is based exclusively on the facts and circumstances described in your request and is
given based on your representation, express or implied, that you have provided a full and fair
description of all the facts and circumstances that would be pertinent to our consideration of the
question presented. Existence of any other factual or historical background not contained in your
letter might require a conclusion different from the one expressed herein. You have represented
that this opinion is not sought by a party to pending private litigation concerning the issue
addressed herein. You have also represented that this opinion is not sought in connection with
an investigation or litigation between a client or firm and the Wage and Hour Division or the
Department of Labor.
We trust that this letter is responsive to your inquiry.
Sincerely,

Alexander J. Passantino
Acting Administrator
*Note: The actual name(s) was removed to preserve privacy in accordance with 5 U.S.C. §
552(b)(7).