The Fair Labor Standards Act requires employers to keep accurate time records for all nonexempt employees. What the law does not require, however, is the use of time clocks for hourly employees.
Nevertheless, time clocks are beneficial for employers with a large workforce, especially when workers are assigned to multiple shifts. Another consideration for using time clocks is tracking hours worked by salaried employees.
Keeping track of hours worked by unconventional employees such as outside salespersons, managerial staff and professionals workers may have different considerations. However, the use of a time clock for these positions holds value for employers.
Misconceptions of Using a Time Clock for Salaried Employees
Before implementing a time tracking system for salaried employees, it is important to acknowledge some misconceptions. A primary reason for using clocks to keep track of the times hourly employees work to ensure accurate pay.
Salaried employees typically receive the same amount of compensation each pay period, regardless of the number of hours they work. Therefore, tracking time for pay is not a primary reason. Furthermore, the FLSA does not prohibit employers from using a time clock for salaried positions.
Using a time clock for permissible deductions such as time off days and personal leave is not in conflict with labor laws.
Why Employers Should Consider a Time Clock for Salaried employees
Salaried employees are entitled to receive fixed compensation when they complete job duties assigned to their job descriptions. Still, it is in the best interest of employers to have these exempt workers clock in using an electronic time clock.
Upon hire, it is understood that salaried employees will be efficient in performing their duties. This could mean working eight hours one day and over 10 hours the next. With this privilege comes an expectation that salaried employees are held to a higher standard of accountability than hourly employees.
Time is not the primary measurement for salaried employees to fulfill their duties. However, it is best for employers to hold these workers accountable without treating them like non-exempt employees.
Generally, salaried employees receive their entire pay even if they work less than 40 hours each week. If no hours are worked, employers are not obligated to pay for that week. The best unbiased way to track this data is with an electronic time system.
The system will help employers keep track of time off, whether it is a full day or half-day. According to company policy and FLSA laws, salaried employees get paid for the entire day. Clocking in provides data on accrued time off, used time and any remaining balance that the employer may consider when issuing compensation.
Not penalizing salaried employees for shorter workdays is different from decreasing pay when they exceed accrued time off. Making sure they clock in gives employers a measuring tool that ensures employees are fulfilling their obligations.
Other reasons that may prompt the need to track salaried employees via an electronic time clock include:
• Purposes unrelated to pay such as recording attendance to stay in compliance with recordkeeping salaried employee information
• To account for billable hours to clients while explaining that the requirement is related to job duties
• Metrics on how much time is spent at work
• Identifying exempt employees who are not working as much as others. Managers can expand duties for those who may not have enough work responsibilities.
General Rules Applicable to a Time Clock for Traveling Employees
There are other nontraditional employees for which a time clock system works. Employees may travel offsite or work remotely for an extended period of time. Employers may need to keep track of work for special projects to ensure job costs are met with productivity.
Typically, ordinary commuting time is not calculated as hours worked. Additionally, sleep time for overnight travel is not considered hours worked. An exception to commuting time is if employees are performing certain tasks during the commute.
Before requiring a time & attendance solution for salaried employees, employers should have a written policy. This should be a carefully crafted document that does not expose employers to penalties under FLSA, or lawsuits from exempt employees.
Clearly communicating the business reasons for instituting the policy will also help. Continued monitoring of the policy for consistent implementation is equally important to keep everyone on the same page.