HR alert - DLSE Clarifies Position: Exempts Can Take partial day Off

The California Division of Labor Standards and Enforcement (DLSE) recently updated its Enforcement Policies and Interpretations Manual to authorize deductions from an exempt employee's accrued vacation or paid time off (PTO) bank for partial day absences under limited circumstances. This reflects the DLSE's adoption of a decision of a California Court of Appeal in a case decided in July 2005.

The DLSE's delay in accepting the court's holding caused much confusion over the past year. However, in July 2006, the DLSE amended its manual (section to reflect the Court's decision. In California, the law authorizes employers to deduct partial day absences from an exempt employee's accrued vacation/PTO bank for absences of 4 hours or more. Different rules apply to partial day absences due to illness.

If you are planning to deduct partial day absences from your exempt employees, it’s important to take the following steps:

  • Communicate it verbally and in writing to affected employees
  • Make an amendment to your Employee Handbook to reflect this change in your policy/procedure
  • Set up a your payroll system or time reporting procedures to accurately reflect partial day deductions for exempt employees

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The opinions expressed by Cynergy, its Executive Advisors, Affiliates and Associates are intended to be general in nature, mere suggestions and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.