Deductions From an Exempt Employee’s Salary

The “salary test” required to validate overtime exemptions provides that an employee must be paid a full weekly salary for any week in which any work is performed. There are certain limited deductions allowed. If an employee works any part of a day, he/she must also be paid in full; no salary deduction is allowed. However, deductions can be made from any vacation, PTO or sick leave balance for the hours not worked, as explained in the examples below.​

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