What’s included in Opinion Letter 2018-14

 

The Department of Labor (DOL) hasn’t always been clear about when you’re able to make deductions from exempt employees’ pay if they’re absent from work.

 

But now that the DOL has issued Opinion Letter FLSA 2018-14 on that topic, you have the guidance you need to make sure you’re paying employees on a salary basis.

 

If the opinion letter sounds familiar, that’s because technically it’s a reissue of guidance the DOL had pulled from circulation from several years.

 

The latest info

 

Here’s where the DOL stands now on the question of whether it’s OK to make deductions from an exempt employee’s salaried wages if the person misses work and has no paid leave time.

 

Yes, deductions can be made for an absence of one or more full days if an employee misses work for personal reasons aside from sickness or disability, according to the DOL.

 

If an exempt employee misses two full days of work, his or her salary can be reduced by the amount that’s equal to the time missed. But if the person misses a day and a half of work, the salary can only be reduced by an amount equal to a full day’s pay.

 

The same goes for absences due to sickness or disability, as long as 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.”

 

The opinion letter also clarifies whether Payroll’s allowed to use an hourly rate to calculate deductions from an exempt employee’s pay if the worker was scheduled to work a shift lasting shorter or longer than eight hours.

 

Federal regs allow for the use an hourly or a daily equivalent of the employee’s full weekly salary when calculating deductions.

 

That means you’re allowed to take salary deductions proportional to the number of hours missed – provided that the employee was absent for at least a full day of work.

 

Note: Along with FLSA 2018-14, the DOL decided to reissue 16 other opinion letters rescinded during the Obama administration.

 

More info: bit.ly/letter548