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The California Department of Industrial Relations Issues Opinion Letter Limiting Employers' Right To Make Deductions From The Salaries of Exempt Employees

June 01, 2001

By George Abele, Steve Berry and KirWilcox

To qualify as an exempt professional, administrative or executive employee under federal and state law, an employee, with narrow exceptions, must be paid on a "salary basis." On May 30, 2001, the Chief Counsel for the California Division of Labor Standards Enforcement issued an Opinion Letter regarding deductions from the salaries of exempt employees. The Opinion Letter makes significant changes to generally-recognized norms for interpreting the Labor Code and the Wage Orders of the Industrial Welfare Commission.

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Image: Stephen L Berry
Stephen L Berry
Partner, Employment Law Department
Image: George W Abele
George W Abele
Partner, Employment Law Department