Don’t feel bad if you have trouble keeping track of which types of deductions the Fair Labor Standards Act (FLSA) does and doesn’t allow your company to take from exempt employees’ paychecks. The rules are pretty murky.

As a rule of thumb, FLSA doesn’t permit deductions from exempts. That’s because the regs state that the amount of money a salaried employee earns can’t be dependent on the number of days or hours he or she works. You also can’t deduct money based on the quantity or quality of work the employee produces.

But – no surprise here – there are several exceptions. What happens if your company accidentally makes an improper deduction? Nothing, so long as it’s an isolated incident and the company corrects it. But if there are repeat violations, entire departments of non-exempt workers can suddenly transform into OT-eligible ones by the magical powers of FLSA.

Permitted and prohibited deductions

Courts have said it’s legal to deduct pay from a salaried employee for any of the following reasons:

• Disciplinary suspensions. Unpaid disciplinary suspensions of one or more days may be imposed for salaried employees who violate workplace rules. The catch: Your company must have a written disciplinary policy that’s applied to all employees (e.g., sexual harassment) in order to legally dock someone’s pay.

• Offset jury fees or military pay. While an employer can’t dock pay for jury duty or temporary military leave, it’s OK to deduct the amount the employee receives as jury duty or military pay (although you’ll likely end up with a ticked-off employee and it’s rarely worthwhile financially to make the deduction), and

• Partial first or last week pay. You’re not required to pay an exempt staffers’ full-week salary in the first or last week of employment, unless the staffer worked the entire week.

Red flags

On the flip side, the following deductions are FLSA red flags These deductions can make a formerly exempt employee eligible to collect overtime:

• Business trips. You can’t deduct salary (or run the clock on paid time off benefits) for absences related to business trips, and

• Lack of work. If an exempt employee is ready, willing and able to work, you can’t deduct money for slow times when there’s little or no work assigned.