You likely know that salaried exempt employees aren’t eligible for overtime pay. But did you know that you can require an exempt employee to work specific hours and track his or her hours worked? Under the Fair Labor Standards Act, employers may require exempt employees to comply with scheduling and tracking procedures, such as working certain days and times, being available by telephone, email or text and recording hours worked.
Why would you want exempt employees to comply with scheduling and time-keeping policies? For a variety of reasons, including ensuring that exempt decision-makers are available to address operational concerns throughout the day, for client billing purposes, to determine employees’ eligibility or accrual of certain benefits, etc. Depending on the nature of your business, you may want only certain exempt employees to work set hours or track their time, so it need not be a requirement for every exempt employee at your company. Just be careful not to impose these requirements on an employee or group of employees for discriminatory or retaliatory reasons.
The sticky issue is what you may legally do with time and attendance information related to your exempt employees. Say, for example, you would like your exempt managers to work set hours from 8:00 am until 5:00 pm. What should you do if a manager continually rolls into the office at 9:00 am? Or what happens if a manager fails to keep track of her work time?
If an exempt employee fails to comply with your attendance and time-keeping requirements, you need to treat the violation as a discipline issue, not a pay deduction issue. Assuming no contractual provisions to the contrary, you’re entitled to discipline exempt employees for their failure to adhere to your company policies. Discipline may include verbal and/or written warnings, performance improvement plans, and even termination, as warranted by your policies and the circumstances. You should not, however, tie the payment of an exempt employee’s salary to the number of hours worked in a week. You also should not dock an exempt employee’s salary for partial day absences. You may dock pay for a suspension for an infraction of workplace conduct rules involving serious misconduct, such as rules prohibiting sexual harassment, drug use, workplace violence, etc. However, such unpaid suspensions must be for one or more full days. This type of unpaid suspension may be made only when the employer is enforcing its written policies that are applicable to all employees. Prorating an exempt employee’s salary based on hours worked or making improper deductions from an exempt employee’s salary will risk the loss of that employee’s exempt status.
Although not a legal matter, you may want to consider the effect that requiring set hours and tracking daily time will have on your exempt employees and their productivity and morale. Some professionals and higher level exempt employees may feel micro-managed when their employer sets their work hours and requires daily time-keeping. Others feel they work around the clock via electronic devices and remote access to email and computer systems so keeping track of total work time may be difficult. Depending on your corporate culture and the circumstances of your operation, the intangible effect of implementing more oversight of exempt employees’ attendance and time records may be worth further evaluation.