The United States District Court for the District of Maryland recently held that deductions from an exempt employee’s weekly salary for leave taken pursuant to an unpaid leave policy offering such leave only in full day increments did not impact the employee’s exempt status. Kulish v. Rite Aid Corp., 2012 U.S. Dist. LEXIS 176760 (D. Md. Dec. 13, 2012).

In rejecting plaintiff's challenge to exempt status based on Rite Aid's mandate that time off for personal reasons be used in full day increments, the District Court held that the rule was lawful as it pertained solely to absences "occasioned" by the employee. The Court did not accept plaintiff's argument that the full day absence requirement made the full day absence one "occasioned" by the Company in situations where the employee merely wanted to take off a couple of hours.

This decision illustrates the importance of ensuring all leave and deduction policies are carefully crafted to maintain exempt status in compliance with 29 C.F.R. § 541.602 and interpreting authority.  Any ambiguities or weaknesses in these policies may be exploited by plaintiff’s counsel, or challenged by the Department of Labor.