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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.
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 and are not people accustomed to clocking in and out. But does the practice make the employer 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 companywide rather than singling out particular employees or small groups of employees within the department.
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 client 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.
So what are your options?
If you are having problems with exempt employees coming in late or excessive absences, you really are best off to document through a performance improvement plan that outlines what will happen if it continues. The most important thing is to follow through with what you promise. Because if you don’t terminate someone with excessive absences but terminate someone else for the same reason, a business owner could find themselves looking at a discrimination lawsuit.