Can we deduct partial sick pay from exempts?

We are being careful as a California employer not to make partial day deductions for sick or vacation time so we don't jeopardize our exempt employees status. My question is: Since the employee receives a printout on his/her check stub of available vacation and sick time shouldn't we be showing that in daily increments rather than hourly to be consistent with our company policy? We spoke to our payroll service about converting the hours to days and apparently they are saying no one does it that way and that their system cannot do this without massive programming changes. What is the best way of accruing and showing this accrual to the employees? Thanks.

Rita Risser's response:

It's great you are being careful about this. All employers need to be, not just those in California, as this is an issue of federal law.

Employers are allowed to deduct partial days from a sick leave/PTO bank for exempt employees. It is only if an exempt employee has exceeded the accrued days that you need to pay attention. In that case, you can not deduct salary for a partial day's absence without jeopardizing the exempt status. The key to employees being exempt is that they receive the same amount of pay, week after week. Since sick leave/PTO essentially allows them to continue to receive the same amount of salary, this is not a problem.

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