State Specific

Exempt employees and sick time

January 6, 2026state-laws

Exempt Employees and Sick Time: What HR Needs to Know About Salary and Sick Pay

HR teams and business owners often ask the same questions: Do salary employees get sick pay? Do salaried employees get paid for sick days? The answer depends on (1) the federal salary-basis rules for exempt employees and (2) your state or local paid sick leave requirements. This guide explains how exempt employees and sick time work in practice—what you can (and can’t) deduct, how PTO and sick banks interact with salary rules, and where state laws can add extra obligations.

For broader, state-by-state context, see SwiftSDS’s hub on California employment laws and related compliance pages.

The baseline: “Exempt” status and the federal salary-basis rule

Most confusion about salary and sick pay comes from the Fair Labor Standards Act (FLSA). Under the FLSA, properly classified exempt employees generally must be paid on a salary basis—meaning they receive a predetermined salary each pay period that is not reduced due to variations in the quantity or quality of work (subject to limited exceptions). These rules are enforced by the U.S. Department of Labor (DOL).

To support FLSA posting compliance, many employers provide the DOL notice Employee Rights Under the Fair Labor Standards Act (and the Spanish version Derechos de los Trabajadores Bajo la Ley de Normas Justas de Trabajo (FLSA) where applicable).

What “salary basis” means for sick time

When HR asks “do you get paid for sick days on salary,” the compliance-focused answer is:

  • If an exempt employee performs any work in a workweek, you generally must pay their full weekly salary, even if they missed time due to illness.
  • You may be able to deduct pay in limited situations (covered below), but improper deductions can risk the exemption.

Key regulation: 29 C.F.R. § 541.602 (salary basis requirement) and § 541.603 (effect of improper deductions).

When you can deduct pay for an exempt employee’s sick day (and when you can’t)

Deductions are generally not allowed for partial-day absences

If an exempt employee is out sick for part of a day, the safest rule of thumb is:

  • Do not dock salary for partial-day sickness.
    You can, however, charge the absence against a PTO/sick bank (see next section).

Practical example: A salaried manager leaves at noon due to a migraine. You generally still pay the full day’s salary, but you may deduct 4 hours from their sick/PTO balance if your policy allows.

Full-day absences: sometimes permissible, but policy matters

For full-day absences due to sickness or disability, federal rules allow salary deductions only in specific circumstances, particularly when the employee is absent for one or more full days under a bona fide plan, policy, or practice of providing compensation for salary lost due to illness.

  • If you have a bona fide sick leave plan and the employee:
    • has not yet qualified for the plan, or
    • has exhausted available sick leave, then a full-day salary deduction may be permissible under federal law.

Actionable compliance step: Make sure your handbook clearly defines eligibility, accrual, use, and what happens after sick leave is exhausted—because your ability to make full-day deductions depends on having a legitimate program.

How PTO/sick banks work with exempt salary rules

A common question behind “salary pay sick days” is whether you can reduce an exempt employee’s PTO without reducing salary. Generally, yes.

You can subtract from leave banks without docking salary

Employers typically may:

  • Pay the exempt employee their full salary for the week, and
  • Reduce the employee’s PTO/sick balance to reflect time missed.

This approach helps HR handle salaried staff sick pay consistently while protecting the salary-basis requirement.

What if the employee has no PTO left?

If the employee has zero sick/PTO balance:

  • For partial-day absences: you generally still pay full salary (and just record the time for attendance/performance tracking).
  • For full-day absences: a deduction may be allowed in limited circumstances as described above, but tread carefully and confirm state/local rules.

State and local sick leave laws: where “salary and sick time” becomes location-specific

Federal law governs exemption and salary basis. State and local paid sick leave laws govern whether sick time must be provided, how it accrues, and how it can be used—often applying to both exempt and nonexempt employees.

Arizona: paid sick time requirements can apply to exempt employees

Arizona’s paid sick time law (from the Fair Wages and Healthy Families Act) can require employers to provide paid sick time, including for many salaried/exempt workers.

If you operate in Arizona, review SwiftSDS’s guide to the Arizona sick leave law for accrual, permitted uses, carryover/frontloading, and documentation rules.

California (and local rules like Los Angeles) add another layer

California paid sick leave requirements and local ordinances can be more detailed than federal law and may include:

  • Accrual/use rules
  • Minimum annual allotments
  • Carryover requirements (unless properly frontloaded)
  • Notice and posting obligations

For Los Angeles employers, local rules can differ from statewide minimums—see City of LA paid sick leave. For broader time-off structuring (PTO vs sick), see California paid time off law.

Why this matters for salary employees: Even if the FLSA would allow a limited full-day deduction in some cases, a state/local sick leave law or company policy may require paid sick time that effectively covers the absence.

Policies HR should implement to stay compliant (and reduce risk)

1) Confirm the exemption classification before designing deductions

Misclassification is a major risk area. If an employee is treated as exempt but doesn’t meet the duties and salary requirements, sick-time practices won’t fix the underlying liability.

Action step: Audit exempt roles annually and when job duties change.

2) Build a “bona fide” sick leave/PTO policy with clear rules

To support compliant administration of salaried employee sick time, your policy should specify:

  • Eligibility and waiting periods (if any)
  • Accrual rate or frontloaded amount
  • Permitted uses (employee illness, family care, safe time where required)
  • Minimum increments for use (where allowed)
  • Carryover rules
  • How PTO and dedicated sick leave interact
  • Documentation rules and anti-retaliation language (commonly required by state/local laws)

If you’re onboarding mid-year or changing benefit classes, plan how you handle accrual timing. SwiftSDS also covers this operational issue in Do you prorate a new employees sick days.

3) Train managers: “Any work in the week” is a payroll trigger

A practical compliance rule for exempt employees:

  • If they answer emails or take calls while “out sick,” they may have performed work—triggering full salary obligations for the week.

Action step: Train leaders on when to discourage work during sick leave and how to route coverage.

4) Align sick leave practices with other compliance obligations

Sick leave administration can intersect with anti-discrimination and leave accommodation duties (e.g., disability-related absences). For example, California’s broader worker protections make consistent, non-retaliatory administration especially important; review SwiftSDS’s overview of anti discrimination laws in california.

FAQs: exempt employees and sick time

Do salaried employees get paid for sick days?

Often, yes—because under the FLSA salary-basis rule, an exempt employee who performs any work in a week generally must receive their full weekly salary. State and local paid sick leave laws may also require paid sick time for eligible employees, including exempt staff.

Can I dock an exempt employee’s pay for being sick one day?

Sometimes, but only in limited circumstances—typically for full-day absences and usually tied to a bona fide sick leave plan after sick leave is exhausted or not yet available. Partial-day salary docking is generally not allowed under the salary-basis rules (29 C.F.R. § 541.602).

Do you get paid for unused sick days on salary?

It depends on the state/local rules and your policy design (separate sick bank vs PTO). In California, payout rules can differ based on how the time is classified. See Do you get paid for unused sick days in california.

SwiftSDS helps employers manage state labor law requirements and workplace postings. For FLSA notice compliance, keep the applicable DOL poster available, including Employee Rights Under the Fair Labor Standards Act.