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California Labor Commissioner Reinstates Position When Employees Peform No Work In A Week

By Jamerson C. Allen
  • June 25, 2002

After some confusion, the Labor Commissioner now states the Division of Labor Standards Enforcement will continue to examine salary deductions for missed work on a work week basis. Consequently, if the DLSE makes a determination that no work has been performed in a week, an employer may avoid payment of salary to an exempt employee.

The Labor Commissioner's opinion, while reflecting the DLSE's current enforcement position, is not binding upon the California courts. While we believe the opinion is well reasoned and persuasive, employers should be aware California courts could reach a different conclusion.

Employers should review their vacation leave policies and practices in light of the Labor Commissioner's March 2 opinion letter. The letter clarifies that where an exempt employee is absent for personal reasons, deductions from the employee's salary should only be made if the absence is for a day or more. Vacation pay, including deductions from vacation leave banks, should not be paid in lieu of salary for absences of less than a day. In contrast, partial day deductions from sick leave banks (but not from pay) are allowed where the employer has a bona fide plan providing compensation for illness or injury.

Finally, the DLSE's current enforcement position suggests that paid time off policies which combine traditional vacation and sick leave are inconsistent with exempt status when applied to absences due to illness or injury. Employers should reconsider applying PTO policies to exempt California employees since, in the DLSE's view, doing so is inconsistent with exempt status.

©2002 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

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