An exempt employee cannot be docked pay under the FLSA in increments of less than one full day for disciplinary reasons. Thus, if an exempt employee takes a long lunch, or is really sick but has used up all sick time, then you run a risk by docking his or her pay. You can, though, impose other disciplinary penalties, however (so long as it is not a suspension without pay without complying with federal and state wage and hour laws).
Check with your state labor department for more information.
Source: Epstein, Becker & Green, November 10, 1998, New York.