Stay legal when tackling exempt workers’ tardiness, poor attendance

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. 

Recently, a group of attorneys who help employers stay on the right side of the law was asked about the legality of an employer’s actions intended to get employees on the job on time.

Clocking in OK
The employer asked the attorneys 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 the employer wondered 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,” Jo Ellen Whitney, an attorney with the Davis Brown Law Firm in Des Moines, Iowa, says. 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), she says.

Mark Adams, an attorney with Jones Walker LLP in New Orleans, Louisiana, agrees. “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,” he says.

“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,” Adams says. “To avoid potential discrimination claims, however, the safest approach would be to implement the requirement departmentwide rather than singling out particular employees or small groups of employees within the department.”

Jerrald L. Shivers, an attorney with The Kullman Firm in Jackson, Mississippi, also says 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’s human resources department 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. HR has plenty of reason to worry, the attorneys say.

“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,’” Mark M. Schorr, an attorney with Erickson & Sederstrom, P.C., in Lincoln, Nebraska, says. “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.”

Schorr says 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, according to Rachel E. Burke, an attorney in the Cincinnati office of Porter Wright Morris & Arthur. “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,” she says.

Jonathan C. Sterling, an attorney with Carlton Fields Jorden Burt in Hartford, Connecticut, agrees. “Losing an employee’s exemption could spell big trouble and leave you on the hook for years of unpaid overtime and penalties,” he says.