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Why You Need a Sick Time Policy for Salaried Employees

Sick woman at work

Chances are, your company offers sick leave to full time employees, since nearly 80% of full-timers get some sort of sick benefit. But if you don’t, there are a few reasons you might want to consider it.

First, it makes it easier to deal with the legalities of exempt employee salary deductions (more on that in a moment). Second, the office is just healthier when there aren’t sick people wandering the halls. It may seem counter intuitive, but paying an employee to stay home when they’re sick benefits you and your company a great deal.

Benefits of a Sick Leave Policy

  • Employees don’t have to worry about losing pay when the inevitable happens, and happier employees do better work.
  • Sick employees can infect the workforce.
  • Sick employees can infect the public in certain types of jobs.
  • It improves employee retention.
  • It allows for salary deductions for exempt employees who abuse the privilege.

Standard Sick Leave Benefits for Full Time Employees

According to the Bureau of Labor Statistics, sick leave benefits are slightly more generous depending on length of service and in larger companies. On average, full time employees get 7 sick days per year for the first year of service. In companies with over 100 employees it’s 8 days. The number of paid sick days rises slightly with seniority.

Sick time by years of service and company size

Salaried Sick Leave Abuse

Here’s where it gets really interesting. When salaried employees take too much sick time and your company doesn’t have a fixed policy, your arms are tied. There’s not much you can do but sit back and watch your employee call in sick whenever they want. The reason for this is that salaried employees are protected in most cases from pay deductions. There are two situations in which problems may arise:

No sick leave policy: While most full time salaried employees have sick leave benefits, it’s not mandated by Federal law and is only mandated by a few states and cities. As a result, some salaried employees don’t have sick benefits because their companies don’t offer them. But since you can’t generally make deductions to salaried employee’s pay what do you do with a salaried employee who gets sick and doesn’t have any benefit? In many cases, they end up getting the benefit by default.

Unlimited leave policy: Additionally, companies who offer unlimited sick time have no legal way of making deductions to the salary of an exempt employee who takes “too much” sick time. According to a recent survey by the Society for Human Resources Management, 3% of companies offer unlimited paid sick time. This could, potentially, be a problem for a big chunk of workers.

Here’s why pay deductions can be so complicated for a salaried employee:

The concept of salary

The reason that you can’t generally deduct a salaried person’s pay is because exempt employees don’t make overtime – they are exempt from making overtime. The presumption is that they work more than 40 hours a week due to the type of work they do. So there can be a little give and take in their total weekly hours. Since they don’t get overtime for the weeks that they work over 40 hours, you can’t dock them pay for the weeks when they work fewer than 40 hours.

Allowed deductions

An employer can deduct from a salaried employee’s pay under certain circumstances.

  1. Salaried employees don’t need to be paid for full workweeks in which they perform no work.
  2. Partial day absences may only be deducted from an employee’s sick or vacation “bank”. Once that is exhausted, partial day absences cannot be deducted from an exempt employee’s salary.
  3. Full day absences for personal reasons may be deducted from an exempt employee’s salary if there is no vacation time in their time-off “bank”.
  4. If the employee misses a full day’s work due to illness, the employer can dock pay after the sick leave allotment has been exhausted. But this is only possible if there is a fixed sick leave policy in effect.

Example

If an employee takes off sick all the time and there is no policy in effect, then because of the nature of a salaried employee, the employer could not deduct the day from the employee’s salary. Similarly, if the employee has an unlimited benefit and takes off sick all the time, the employer cannot deduct from the employee’s salary because there would be an inexhaustible number of sick days to allot to the absence and so, legally, could never deduct from the employee’s pay.

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39 Comments

  1. Steve Skillern
    Steve Skillern March 3, 2017

    Peggy, I have some questions around Exempt employee status and employer deductions. My company has a defined Sick Leave Accrual Policy. I frequently work overtime as an Exempt employee. Since I am a salaried Exempt employee I of course do not get paid anything additional for that time.

    Conversely, anytime I have a doctor or dentist appointment I am have been instructed to schedule those appointment after business hours or on weekends, when possible.

    In the event I DO have to take time for those dr or dentist appointments during regular work week Mon-Fri 7:30am-4:30pm work hours, I am told that I must do it during my lunch hour. Whenever that happens and I take longer than 1 hour OR if I only can go to the doctor or dentist during non lunch regular business hours I am supposed to log those hours on my time sheet (yes, we do time sheets for ALL employees, exempt and non-exempt) and deduct from my accrued sick time.

    Example: I have a Dr. appointment on a regular work Monday. I am away from my job from 9am – 11am attending the appointment. I am required to deduct 2 hours of Sick Pay from my Accrued Sick Pay Bank. Yet, if I work 50 hours that same week I do not get any additional pay because I am exempt. Is this practice in violation of FLSA or any other statutory regulations?

    • John
      John May 15, 2017

      I would like to see a response to this as well.

  2. Peggy Emch
    Peggy Emch May 16, 2017

    As an exempt employee, your employer cannot make monetary deductions from your paycheck for a few missed hours during a regular workday and, in your case, the employer is not doing this so they are not in violation of exempt employee deductions. Requiring that you mark your time away as sick is reasonable, as is not getting paid overtime. As long as you’re getting your full salary each week, all should be well.

  3. Kiki
    Kiki May 16, 2017

    I have a question, I am a salaried employee and I work 60 plus hours a week, where I work there is not paid sick leave. If I take off a day because I am sick the pay for that day is deducted from my pay check. I have been home sick and managed my job from my phone and that days pay was still deducted from my check. Can this be done?

    • Peggy Emch
      Peggy Emch May 17, 2017

      You should talk to an employment lawyer about it. Deductions on salaried paychecks may or may not be allowed.

      • Frank
        Frank February 16, 2018

        I am an exempt employee and want to know, if i am home sick and still respond to emails from my boss, can my pay still be deducted for those days missed? I have not scene nor have i signed any sick leave policy.

  4. John
    John May 16, 2017

    If I work at least 40 hours during that same week, I would not consider this reasonable.

    • Peggy Emch
      Peggy Emch May 17, 2017

      Reasonable as far as the law is concerned… Even legal employer practices aren’t always “fair”. Talking to a lawyer about it might help you know what to consider when looking for a new job in the future.

      • John
        John May 17, 2017

        Fair enough. Thank you for the clarification.

  5. Ally
    Ally May 24, 2017

    Our company has a sick leave policy in place for exempt staff. If an employee has no remaining sick days and ends up needing a sick day, we can dock her salary by one day?

  6. Dorothy Clark
    Dorothy Clark May 24, 2017

    I am an exempt salaried employee and work in the medical field ,my office has been closing on a few occasiona this past few months due to my doctor being out ill and I was informed that I must use my pto time for this , I work all year to get my vacation time work thru lunch and often stay late .Can I be made to take my earned pto ?
    I am not requesting time off I have no choice if the company closes the office but they say I have to use it ?

    • Peggy Emch
      Peggy Emch May 26, 2017

      I am not a lawyer and so you should look into this further with an employment lawyer but here is a statement from the DOL that should get you on the right track in your research.

      “An employee is not paid on a salary basis if deductions from the employee’s predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If an employee is ready, willing and able to work, deductions may not be made for time when work is not available.” 29 C.F.R. § 541.602(a) (emphasis added).”
      https://www.dol.gov/whd/opinion/FLSA/2005/2005_10_28_46_FLSA.htm

  7. Maria
    Maria June 2, 2017

    I am a salaried employee who puts regularly 12/14 h a day and was sick home with fever two days . My employer deducted them from my pay . Is that legal ?

  8. Andrea
    Andrea June 6, 2017

    I am a salaried employee and I work mostly in the office but I’m available by phone or email. They now have us punching in and out from work to track our hours but they are not tracking the work time away from the office? If they want to track time should they be tracking all of your time work? Also they only have some salaried punching in and out like supervisor and managers but director and above don’t is that correct?

    • Peggy Emch
      Peggy Emch June 6, 2017

      Hi Andrea,

      Directors don’t usually clock in and out so that’s pretty normal. If you are working at home and are hourly, you should clock in and out at home too. If you don’t, then you shouldn’t be working.

  9. Jynnifer Dodson
    Jynnifer Dodson June 9, 2017

    Hi Peggy,

    If I am an exempt, salaried employee that has worked 38 hours from Monday to Thursday and I call out sick on Friday, how would sick time hours be logged for my sick time bank? 2 hours to equal 40 or 8 hours because the business is open 8 hours that day? BTW, we are in AZ with the Paid Sick Leave Law going into effect July 1, 2017.

    Thank you, Jynn

    • Peggy Emch
      Peggy Emch June 12, 2017

      Hi Jynnifer. Generally, sick time is deducted based on how many hours you typically work in a day. So if you usually work 8 hours and you’re out the whole day sick, then 8 hours would be deducted. But if you only work 40 hours a week and go home when you reach 40, you might come up with another arrangement with your boss.

  10. Aileen
    Aileen July 4, 2017

    Hi!

    I am an exempt employee who works close to 50 hours a week. Often times when I call in sick my boss will email or text me to ask things about work. I wind up working from home on those sick days. Is that technically a sick day? Should it be counted as such and are there rules that address this situation?

    • Peggy Emch
      Peggy Emch July 5, 2017

      Hi Aileen. If you have a set number of sick hours to use per year, then hopefully you can just use only the hours you actually took off during a day, rather than saying you were out for an 8 hour day. Or simply not work at all! You can recover faster with rest. You should try talking to your employer about it.

  11. Chanda Cooper
    Chanda Cooper July 12, 2017

    My boss says im salary paid but does my time hourly. She makes me clock in and out showing 8 hours even if I worked 10. She all of a sudden said that I have to work 40 hours to save 2.5 hours for leave time. I’m taking 5 days off for my son who has epilepsy and is having surgery and she’s telling me she won’t be paying me for those days missed because I haven’t had time to store any leave hours. I’ve been salary paid for a year now and she decided to start this this week. Can she do this?

    • Peggy Emch
      Peggy Emch July 18, 2017

      Hi Chanda,

      It depends on what is in your contract or employee handbook. Was your first year the probationary period?

  12. Dana
    Dana July 19, 2017

    If we give vacation and sick time for our exempt salaried employees and they use all of their time (they never work over 40 hrs) and the employee comes in the office with the flu for even 5 minute its my understanding we have to still pay them…with that being said my staff knows this so when they are “out of time” they still come in sick, stay for 30 minutes then say they are too sick to work and have to leave knowing they are going to get paid. So I put a stop to this and told them to not come to work if they are sick, plus the other staff members are getting upset because when the employee does this just to get paid and also are putting the other staff members at risk of getting sick to. So am I ok to tell them to stay home and not come in sick and contagious and also not pay them for that day?

  13. Alex P
    Alex P October 24, 2017

    Hi,

    I am an exempt employee, recently I fractured my ankle. My employer wants me to work from and use my vacation time for the 2 weeks i have medical leave. If I am still working from home am I required to use my vacation days? I do not mind using the days if I was not required to work from home. I’d rather just take the 2 weeks off.

    Thank you

    • Peggy Emch
      Peggy Emch November 2, 2017

      In general, if you’re working and clocking work time, you’re not taking vacation time. You either work or you take time off, not both. Now, maybe you work 6 hours from home and take 2 vacation hours, etc.

  14. Rachel
    Rachel November 17, 2017

    I am the payroll manager for a business located in a county where a paid sick leave ordinance was recently enacted. Historically, our few salaried employees have always been allowed to take absences, for any reason including illness, as needed. These employees then work a bit extra to catch up on missed work as necessary. There is no interruption in pay as a result. When this type of employee takes time off for an illness, should I deduct from her sick leave bank? Financially, it doesn’t seem to matter since she is paid no matter what.

    • Peggy Emch
      Peggy Emch December 4, 2017

      Hi Rachel, it sounds like you might want to keep records for compliance reasons. But I would suggest contacting local authorities to be sure.

  15. Vanessa
    Vanessa November 27, 2017

    I am salary and we have personal and vacation time. Our office closed early and they want me to use 3 hrs of my personal time or they will dock my pay. Can they do that?

  16. Jodi
    Jodi December 7, 2017

    Hi Peggy,
    I work for a small family owned company that provides 60 hours sick time per year. However, we only work 7 1/2 hour days which includes a lunch time of 45 minutes. All employees are exempt and paid a weekly fixed salary. (At the moment there is no written policy in place.)

    How do I account for deducting sick time out of the “bank?” The way I’m seeing it the lunch time shouldn’t be counted as sick time because:
    Let’s say I have Dr. Appt. at 3:15 (we close at 4:00) and I choose to skip lunch at noon and take lunch at 3:15-4:00 to accommodate my appointment. Then no “sick time” is deducted from my banked time. That part is simple but does that also work with full days and more hours missed like below example?

    So my question is, does this mean our sick time is based on a 6.75 hour workday and not a 7.5 hour workday because .75 hour of it is lunch?

    Example: I get sick at work and leave at 12:00. Came in at 8:30am. So to account for this in sick time, I would count my lunch from 12:00-12:45 and sick time begins at 12:45.
    Is this correct?

    And if I take a whole day off, I should only deduct 6.75 hours from my sick time and leave out the lunch time of 45 minutes? Yes? No?

    Thanks!

    • Peggy Emch
      Peggy Emch December 12, 2017

      Hi Jodi,

      That’s a good question and one only your employer could really answer since there is no written policy on this. I feel like your thought process is logical but since it’s a paid lunch, it might be fair for your time off to reflect a full day. Again, only something your employer could really answer.

  17. chrissy
    chrissy December 18, 2017

    Hello Peggy,

    I live in SC. I am a salaried, exempt employee. I do not have a sick pay “bank” but I do have a vacation pay “bank”. I was out sick from 11/30-12/7. I already had a personal day for 12/8. I sent my supervisor my doctors excuse saying that I could return to work on 12/11. But on 12/8 I was told that I needed an excuse stating I was “healthy enough to return to work”. I didn’t understand this since they have never requested this before and I had previously provided my excuse. I was not able to return to work until 12/13 because it took me a few days to get the second excuse. I was deducted a day from my pay. My questions are: if I don’t have sick time can my employer use my vacation time to pay me? Can my employee deduct my time for the days I was out getting another excuse, when I was ready and able to return to work per my first excuse?

    • Peggy Emch
      Peggy Emch January 8, 2018

      Hi Chrissy,

      Your questions are worth posing to a lawyer. Your thinking sounds clear to me but I am not qualified to give legal advice.

    • George McHugh
      George McHugh January 9, 2018

      Chrissy- If your employer was not wrong for not accepting your doctors note, they were at least stupid. If they wanted a second opinion, then they should have sent you to their doctor, at their expense. This could be considered discrimination under the ADA on its own. The single day deduction was most likely a violation of Federal law, as you were available for work, and released by your physician. I think that a short conversation with HR should get you your pay back, if not, file with your State department of labor, or the US DOL, and they likely will have to pay you your pay plus possible penalties depending on your State’s regulations. https://www.dol.gov/whd/opinion/FLSA/2005/2005_01_07_7_FLSA_PaidTimeOff.htm

  18. Kasia Prantalos
    Kasia Prantalos January 25, 2018

    My husband works for a large company. He is a driver and delivers to grocery stores. He got sick at 2 am Monday morning, and called in right away, with a stomach flu and he was told that because he didn’t call on Sunday at 3pm his pay will go from 33 an hr to 15 an hr for the 2 days he was sick. Is this legal?

    • Peggy Emch
      Peggy Emch February 3, 2018

      You should ask an employment lawyer about this.

  19. Philip Royle
    Philip Royle February 5, 2018

    I am an exempt employee. They just started docking our sick leave accruals when we r on vacation? Is that right?

  20. R. Johnson
    R. Johnson February 7, 2018

    My company does not have a sick leave policy. I am a salary employee. I never miss work or call in sick. I called in last week when I got sick and had to go to the doctor. I missed two days of work. When I went back to work the next week before pay day my boss told me she was taking my vacations days for the two days I was out. l was never told that my vacations days would be taken when I became salary employee.. Nothing verbal or written. Manager never told me when I called in that I had the flu that she was demanding to take my vacation days. She told me do not come to work you are sick and stay home. The bam out of the blue ..you will loose 2 vacation days. Is this legal since nothing was written and given to me or was I ever told that is what she was going to do.

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