© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 61 generally works forty hours per week but uses ten hours of unpaid leave under the FMLA, the employer may deduct 25 percent of the employee’s normal salary for that week. If an exempt employee takes leave pursuant to the Small Necessities Leave Act (SNLA),343 the Massachusetts Paid Family Medical Leave law344 or any other Massachusetts leave law, and the leave does not also qualify as FMLA leave, deductions may only be made from the employee’s pay for leave taken in full-day increments.345 For example, if an exempt employee works part of a day and takes leave pursuant to the SNLA for the remainder of the day, the employee must be paid for the full day to avoid compromising the salary basis test.346 (5) Deductions from Vacation or Leave Banks There is an important distinction between deductions from the salary of an exempt employee and deductions from an exempt employee’s vacation or leave bank. Deductions from leave banks are not treated as deductions from salary, so long as the total amount the employee receives in his or her paycheck each pay period, including any amounts from paid vacation or sick leave, equals the employee’s full predetermined salary.347 An employer may mandate use of vacation time from an employee’s vacation bank on a particular day when the employee is not needed due to a lack of work, even though a reduction in pay under those circumstances would constitute an impermissible deduction for an employer-occasioned absence.348 Similarly, deductions from leave banks in less than full-day increments are permissible, whereas partial-day deductions from salary are not permitted.349 An exempt employee who does not have accrued leave benefits or who has a negative balance in his or her leave bank must still receive full salary for any day in which the employee is willing and able to work, and on any day in which he or she actually performs work.350 Employers should be cognizant of certain pitfalls associated with deductions from leave banks. If a leave bank or vacation policy is not carefully drafted and administered, deductions for negative leave may in certain circumstances lead to inadvertent violations of the salary basis test. For example, if an exempt employee performs some work (i.e., checks and responds to e-mails) during a “vacation day,” that action may cause the day to be considered a partial-day, rather than a full-day, absence. If a deduction is made from the employee’s leave bank for that “vacation 343 See Section XI.E for a discussion of this statute. 344 See Section XI.C for a discussion of this statute. 345 DOL Wage & Hour Opinion Letter FLSA2007-6 (Feb. 8, 2007). 346 Id. 347 DOL Wage & Hour Opinion Letter FLSA2009-2 (Jan. 14, 2009). See also DOL Wage & Hour Opinion Letter FLSA2005-41 (Oct. 24, 2005) (finding permissible employer’s mandated use of accrued vacation on days when employer’s facility is closed due to inclement weather). As explained in Section I.A.3, there are additional risks associated with deductions from leave or vacation banks under Massachusetts law because vacation time is considered wages. 348 Id. 349 DOL Wage & Hour Opinion Letter FLSA2009-18 (Jan. 16, 2009) (“Employers can, however, make deductions for absences from an exempt employee’s leave bank in hourly increments, so long as the employee’s salary is not reduced.”). 350 DOL Wage & Hour Opinion Letter FLSA2009-2 (Jan. 14, 2009).
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