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With all the talk of moving the exemption status, we are seeing an up-tick in calls about managing issues with those employees who are exempt who struggle with employees straggling in late or not coming in at all is often at the top of the list of employer frustrations. The problem can lead employers to devise creative solutions, such as requiring management employees to clock in and even docking their pay when they’re late. But a solution that’s legal is more important than one that’s creative.
First things First
When I speak at conferences on managing tardiness, I will ask the room to all raise their hands. I explain that the start time in their office is 8 AM and I ask them to put their hands down when the employees is late. I start listing times at 7:45. It is always surprising to see the vast differences that we as have as to define what “late” means. So with your employees tell them exactly what you define as late. In my office, the phones begin ringing at 8 AM. We ask that everyone be answering the phones at 8 AM and not having conversations about last night’s reality TV show in the kitchen while the coffee is being made and they are heating up some breakfast. But unless we explain our expectations, they can’t be expected to read our minds.
Clocking in OK
Employers often ask if it can require employees in one department with attendance and tardiness problems to clock in and out. All are salaried employees exempt from the Fair Labor Standards Act’s (FLSA) overtime provisions, not people accustomed to clocking in and out. The employer stressed that the data collected would be used just for informational purposes and would not affect pay. But employers wonder if the practice would make it vulnerable to discrimination charges.
You can certainly require better records regarding individual attendance and tardiness even if employees are exempt. But employers can’t use a timekeeping process to affect employees’ pay if they are classified exempt under the FLSA except in very specific and limited circumstances such as calculating usage of the Family and Medical Leave Act (FMLA).
As long as the information doesn’t affect pay and is used solely for other purposes, such as discipline for not adhering to office hours, it’s permissible to require salaried exempt employees to keep time records, including clocking in and out.
If your tardiness and attendance problems are isolated to a particular department, it wouldn’t be inappropriate to limit the timekeeping requirement to that department. To avoid potential discrimination claims, however, the safest approach would be to implement the requirement department wide rather than singling out particular employees or small groups of employees within the department.
The employees can be required to clock in and out as long as a protected status—for example, race, color, religion, national origin, sex, age, or protected activity— is not a motivating factor and the decision does not disproportionately affect employees in a protected class.
What about docking pay?
Although employers can safely require exempt employees to clock in and out, tackling a tardiness problem by docking their paychecks is a different matter. Another employer asked about the legality of a CEO’s decision to dock workers’ pay $25 for every five minutes an employee is late. All the employer’s workers are classified exempt.
One of the primary requisites for an employee to be properly treated as exempt from the overtime requirements of the FLSA is that he be paid on a salary basis. The ‘salary-basis’ test for exempt status requires that an employee be paid a predetermined salary for each week in which any work is performed regardless of the quantity or quality of work and that his salary is not subject to reduction based on the quantity or quality of work.
Some deductions for absences of at least a full day as well as absences for less than a full day in connection with qualified FMLA leave are allowed under the law, deductions for tardiness are not permitted.
Docking paychecks creates a bigger problem than it solves. While it’s understandable that an employer would become frustrated with employees who are consistently late to work, rather than making deductions from their pay, which effectively converts exempt employees into nonexempt employees, they instead should be disciplined for their tardiness.
Losing an employee’s exemption could spell big trouble and leave you on the hook for years of unpaid overtime and penalties.
So What is the Solution?
Try to live by the “three strikes” rule. The first strike is when you need to explain to your employee what is late, in your eyes. The second strike is after several repeated verbal conversations about the importance of being on time, put it in a performance improvement plan and have them sign off understanding that they know it is important they are on time. And the tough one, strike three, let them go (even if they are the most important person in your organization). It is tough love in many cases, but if you allow one person who is important to an organization to get away with bad behavior, than others can follow suit. If you don’t hold everyone to the same standards, you are then opening up a possible case of discrimination. Good luck!