Legal Question in Employment Law in California

Their PTO bank can be charged for the time, but they cannot lose pay over it. If they worked during that day, they must be paid for a day, because the smallest unit of pay period allowed for exempt employees is a day.

If the company has a policy of requiring use of earned PTO, then the company can require the exempt employee to use the earned PTO if a full business day is not worked. If you are paid because you use earned PTO, you are not losing money. If you don't have any earned PTO, they cannot deduct pay from an exempt employee who does not work a full business day.