Oh, I can do that, I’m exempt!

 

I recently had a call from a member expressing their frustration with their exempt employees strolling into work at a time that “works for them” and leaving when they feel their day is done versus following their employer’s work schedule. It seems that these employees are translating their exempt status into “exempt” from work schedules, time and attendance policies, leave approval policies, and other company rules. I explained to the member that employers do not have to tolerate this behavior, and yes, you can set expectations and even discipline exempt employees for violating company policies or rules!

The term “exempt” means that an employee is not required to be paid overtime pay when they work over forty hours in a workweek. That’s it! Yes, there are some regulations that govern exempt employees based on their wages, such as how much is required to be earned as a minimum, permissible deductions from wages or use of paid-time-off benefits to name a few. However, these regulations do not exempt this group of employees from the company’s work schedules and other policies.

Requiring employees to request permission for late arrivals and early outs, etc., can be applied to nonexempt and exempt employees. In addition to having approval processes in place, they can be asked to record their time worked. You can have predetermined work schedules, and you can have them track their time by clocking in and out or by maintaining a timesheet to record the time worked and not worked.

When an exempt employee consistently arrives to work late or leaves work early for personal reasons or simply by choice, this conduct can be addressed, even with disciplinary action by you, the employer.

Although exempt employees can be required to record and track their time worked, this time cannot be used when determining pay for them. Exempt employees must still receive their predetermined pay as required under the Fair Labor Standards Act (FLSA). Exempt employees cannot be subject to a wage deduction, reduction in pay or variations in pay based on quantity or quality of work. Employers may make deductions for full-day absences for personal reasons and sometimes for full-day absences due to illness. An employer may not make deductions for partial-day absences unless an employee is on family and medical leave. Under the FLSA, employers may require or allow employees to use paid leave for partial- or full-day absences. This means that although you cannot reduce an exempt’s employee’s pay for coming in late or leaving early, you can reduce their paid leave (i.e., vacation, personal, sick leave, etc.).

So, let’s start having conversations with exempt employees about time and attendance expectations. We can do that!

If you want to know more about exempt employees or have other HR questions, we’d love to help! Give us a call or send an e-mail to SHRM’s Ask an Advisor service. We’re also available by chat. It’s one of the most valuable benefits of SHRM membership!

SHRM’s Ask an Advisor service is a member benefit through which SHRM’s HR Knowledge Advisors share guidance, real-life personal and professional experiences, and resources to assist members with their HR-related inquiries. We receive questions from HR professionals on a wide range of topics ranging from pay for hours worked to state disability benefit requirements. 

 

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