While there is no law mandating that employers track exempt employee time, no prohibition exists against this practice. Merely creating a policy for them to clock in and out does not change their exemption status. The key is to not deduct make deductions from their salary based on how many hours they work.
Is Timekeeping for Exempt Employees Desirable?
If timekeeping is not required, the question many employers ask is: What goal is achieved by having a time recording system for exempt employees? One answer might be related to FMLA. Not keeping accurate records of exempt hours may weaken the employer’s side during a dispute.
All employees must meet the 1,250 hour threshold for eligibility. Typically, the burden of proof rests on the employer to disprove that the employee failed to meet this requirement. Without it, the employee has a strong chance of winning.
Another perspective is the requirement by some employers to know whether the exempt employee worked a full schedule. Exempt status does not tie an employee to a standard 40 hour work week. However, employers still have a business to run and must account for productivity among all employees, both exempt and nonexempt.
Still, a record of hours could settle a dispute about whether the employee meets all applicable exemption requirements. The value of these records will largely depend on accuracy. A reliable timekeeping system will support management’s consistent and rigorous enforcement of the company’s timekeeping policy for employees with an exempt status.
4 Reasons to Include Exempt Employees in a Time and Attendance System
With schedling improvement and accurate calculations of overtime hours, the benefits hourly employees get from a digitized time solution are obvious. But for exempt employees, the benefits are not so obvious. There are clear advantages for employers.
However, what do these employees have to gain from a time and attendance system? Should employers include exempt employees? Many would recommend yes. The four reasons below explain why it is a good idea for exempt employees and their employers.
1. Promote Work-Life Balance
Tracking exempt time is not always about catching employees doing something wrong. There might be many instances where exempt employees do not say they are putting in 12 hours until they are sitting in an exit interview.
Providing timekeeping for exempt employees through an easy-to-use tracking tool gives employers a chance to become proactive. They can identify employees who might be approaching burnout and make changes before they are handed a resignation letter.
Data captured in the tracking tool can be used to redistribute workloads. This can improve productivity and motivate employees with job satisfaction. Employers could also see better long-term retention rates.
2. Get Accurate Tracking of Accrued Time
Generally speaking, employees appreciate the autonomy of a convenient real-time tracking tool that helps them manage time off accruals. Adding exempt employees to the company’s tracking solution gives them the freedom to see how much time they have accumulated.
This information is helpful to plan ahead for vacations, which also benefits the employer. Managers will know how many time off requests have been approved. They can make informed decisions bout approving new requests without disrupting departmental workflow.
3. Ensure Leave Eligibility
The need for a leave of absence is often the result of a significant life event. Whether illness or the birth of a baby, it can be a stressful time to ask for time off from work. Often, there is some confusion about eligibility and the duration of a LOA, especially if it is for medical reasons.
The Family and Medical leave Act determines eligibility based in the employee’s hours of service within a 12 month period before the leave request. Keeping track of exempt employees’ hours ensures accurate records are used to make this decision.
In addition, employers can use the information to track intermittent leaves.
4. Stay Compliant with FLSA
Beyond business competitors, compliance with federal labor laws is probably the most challenging aspect of running a successful business. While FLSA does not require that employers track exempt employee hours, some local jurisdictions do.
Employers must keep track of the laws and also know they are following exempt rules set by the federal government.
These four reasons to include timekeeping for exempt employees with management systems are just a few recommendations to consider. In some cases, exempt employees are physically clocking in and out.
In other situations, employers may still want them to log the time they spend on different projects and tasks. Cloud-based and desktop timekeeping solutions can keep both the employer and exempt employee on the same policy page.