Exempt employees who show up late or decide not to come to work at all is on the top 10 list of frustrating things employers face. To resolve the problem, some employers attempt to devise creative tactics.
Some employers change policy and require that exempt employees begin clocking in and out. Others may start docking pay when this group of employees are late. This might be viewed as a creative attempt to curb tardiness and absences.
However, it is not always legal with employees who are classified as exempt. The key is preventing challenges from exempt employees clocking in and out. One docked check switch their status from exempt to nonexempt and leave employers liable for overtime pay.
Establishing Rules for Clocking In and Out
Surprisingly to some, FLSA does not keep employers from establishing some type of time tracking method for exempt employees. Compliance with employment law, however, requires the policy to be implemented equally.
This means that if one department with exempt employees uses a time clock for problems with attendance and tardiness, it must require the same in other departments, even if attendance is not an issue. Despite the fact that exempt employees are not accustomed to clocking in and out, employers can require they do so to monitor hours worked.
In addition, this is an acceptable practice when employers:
• Collect time and attendance data for informational purposes
• Use data for disciplinary actions
• Do not deduct tardiness or days off from exempt pay
• Follow time clock requirements consistently
Requiring that employees keep better records of their attendance and tardiness is not against the rules. The process simply cannot be used to affect pay if it conflicts with FLSA rules for exempt pay. The only limited exception might be to calculate usage of FMLA.
New FLSA Regulations
Recently, new FLSA rules changed the way employers could classify certain job titles. Broadening the pool of employees who are eligible for overtime pay will necessitate staffing changes.
Employers will need to scale back on hiring and change recruitment strategies. Many will also need to rebrand roles from exempt to hourly. Naturally, this will impact how exempt employees clocking in and out is handled.
Salaried employees with an annual pay that is less than $47,476 are now eligible to receive overtime pay. This also means that they are susceptible to other rules that apply to nonexempt employees. Tracking the hours they work are no longer under FLSA exempt rules.
If this group of employees work in the department with attendance problems, employers must communicate how changes to the regulations affect attendance tracking. This includes explaining that pay is subject to deductions when employees are late or absent.
In some instances, isolating the timekeeping requirement to a single department with attendance problems is appropriate. What might lead to potential discrimination claims, however, is singling out specific employees. This is particularly true if an employee was previously classified as exempt, but changes to FLSA changed their job status.
There is another consideration for employers who decide to implement a clock in and out requirement. The decision should not be motivated by a protected status – race, gender, age religion. Additionally, employees in a protected class should not be disproportionately affected.
To Dock or Not to Dock
Bottom line, exempt employees clocking in and out is acceptable. However, docking paychecks because there is a tardiness problem adds another layer to the issue. Salary-based pay is a primary requisite to properly treat employees as exempt.
Otherwise, docking their pay has another side. Employers must reclassify them to nonexempt and pay overtime when the same employees work more than 40 hours during the work week. The salary test for exempt classification is that employees receive a predetermined salary for each week they work.
Like most rules, there is an exception that must be adhered to if an employer wants to dock the pay of exempt employees. Some deductions are acceptable if the time is connected with a qualified FMLA leave. Note that this is not related to any disciplinary action. Excessive tardiness is not permitted.
Docking paychecks for excessive absences or tardiness can create bigger problems than are solved. The frustration is understandable. When employers have labor standards to meet, timeline deliverables, etc., they should expect employees to not take advantage of exempt status benefits.
Rather than doing what essentially converts them from exempt to nonexempt status, employers should find other ways to discipline the tardiness. Not following the rules properly could leave employers on the hook for penalties and unpaid overtime.
