No or the exempt status of the employee will be lost. If an employer has a vacation policy, the employer may deduct TIME from the exempt employee’s unused portion but the employee still must be paid his/her earned wages at the next regularly scheduled pay period. Check your company’s vacation policy to see how unpaid time off is treated. Generally speaking, where an employee has no vacation time left and so now needs to take unpaid time off for personal reasons (other than sickness or disability), the employer can only dock the pay of an exempt employee where the time off is taken in a FULL-DAY increment.

To summarize, where the personal reason is not due to sickness or disability and management has approved the unpaid time off, the exempt employee must take a full day off (typically 8 hours) in order for the employer to dock their pay 8 hours. Keep in mind that if the reason IS due to sickness or disability and the exempt employee needs unpaid time off, the employer cannot dock the wages, even for a full day.