Instructors can excuse students from assignments by granting them N/A status. They simply go to the Class Assignments page, find the assignment they're looking for, click View Student Responses, and select the students they wish to excuse. See screenshot below.
PLEASE NOTE: If a student has an N/A status on an assignment, he or she can still complete it and see their score when they finish. However, this score will not appear in the Current Assignments view or by their name in the Gradebook or any reporting, and the score will not count towards their grade.