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Paid Sick Leave and Exempt Employees

Published:  September 28, 2015

Massachusetts employers have had a lot to learn in recent months due to the new Earned Sick Leave Law.  As small businesses and human resources professionals become more comfortable with their new responsibilities, it may be time to take the topic a step further.  What happens, for example, when an exempt employee has exhausted his or her 40 hours of paid sick leave under the new law?  Does future sick leave become “unpaid”?  That is, can an employer deduct from the exempt employee’s pay for additional health-related absences?

As a general rule, under the Fair Labor Standards Act (“FLSA”), an exempt employee must be paid their full weekly salary for any week during which the employee performs any amount of work.  Thus, a covered employer may not reduce an exempt employee’s pay for partial-day absences, including those necessitated by doctor’s visits, unless the absence constitutes intermittent leave under the Family and Medical Leave Act (“FMLA”).  Aside from FMLA leave, deductions for full-day absences due to sickness or accidents are permitted only if “made in accordance with a bona fide plan, policy, or practice of providing compensation for loss of salary occasioned by both sickness and disability.”  Thus, the FLSA allows Massachusetts employers large enough to be subject to the paid sick leave provisions of the Earned Sick Leave Law to deduct from an exempt employee’s salary for health-related full-day absences once the employee exhausts their sick leave for the year.  The same is true for full-day absences during the initial 90-day probationary period during which sick leave may not be taken.  

Still, employers should be very cautious when deducting from an exempt employee’s pay, since a mistake may lead to loss of the employee’s exempt status.  If you have any questions about the Earned Sick Leave Law, FLSA, FMLA, or the interplay between these leave laws, please contact any of the attorneys at Royal LLP at (413) 586-2288.