518-373-4111
With the new rule regarding the FLSA exempt employee overtime threshold being announced imminently, businesses with affected employees need to be taking into account many things, including calculating the number of hours current exempt employees are working. But does it violate the current FLSA rules about tracking exempt employee time to require those employees to clock in and out?
It doesn’t violate the FLSA to have an exempt employee clock in and out. However, we would recommend 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 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 due any time now, we recommend that employees who may become non-exempt start tracking their time. We think 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.
Need help tracking hours?
GTM can help with that. Our automated time and attendance system saves you time and money, while keeping you in control of your employee’s hours and schedules. Call us at (518) 373-4111 to learn more.
