Requiring a salaried, exempt employee to use a time clock is not an FLSA violation. It is recommended, however, that an employer have a business reason to track an exempt employee’s hours. For example, an employer may opt to track an exempt employee’s hours for purposes of client billing, grant tracking, intermittent FMLA leave or sick leave, hours-based benefits calculations, or paid time off benefits.
Should you choose to track the hours of your exempt employees, you’ll want to be sure to be careful about how you use this information. Keep in mind that while you can hold an exempt employee to a schedule, the FLSA’s salary basis test states that these employees are paid a set salary no matter how many or few hours they work. Reducing an exempt employee’s salary based on hours worked may result in the loss of the exemption, a wage and hour claim from the employee, or even a DOL audit. Pay may be reduced in certain circumstances, however, such as a full-day absence for personal matters, or a full-day absence for sickness if a bona fide sick leave plan is offered and the employee has already used all of their paid sick leave.
With the FLSA exemption changes beginning December 1, 2016, it is recommended that employees who may become non-exempt, start tracking their time. It will be useful for employers to see the number of hours each employee works so they can compare the cost of keeping them exempt (which may require a raise) versus paying them overtime if they continue to work the same number of hours after being reclassified as non-exempt.
Should you have any additional questions regarding this or other employee topics, contact the professionals at CyQuest for help!