Should Employers Keep Time Records For Exempt Employees?

By John E. Thompson

Should an employer keep records of the time worked by employees who qualify for a federal Fair Labor Standards Act minimum-wage and/or overtime exemption?

At the risk of giving the proverbial “lawyer’s answer,” it depends.

Is timekeeping mandatory?

First, it is necessary to know whether timekeeping is required for some reason under the particular exemption being relied upon. If the employee is exempt only from the FLSA’s overtime requirement, for example, then an accurate record of all his or her hours worked is still necessary in order to ensure compliance with that law’s minimum-wage provision.

It might also be that such a record is essential for purposes of determining whether the applicable exemption itself is being properly maintained.

As an illustration, consider the FLSA’s Section 7(i) overtime exception for commission-paid employees of a retail or service establishment, which requires that a worker’s regular hourly rate of pay for an overtime work week must be more than 1.5 times the FLSA’s minimum wage. Without accurate hours-worked information, an employer cannot know for sure whether this condition has been met. Consequently, the recordkeeping requirements for Section 7(i) incorporate by reference the general FLSA timekeeping obligation.

Is timekeeping desirable?

If timekeeping is not obligatory, then the question becomes one of what other goal(s) would be achieved by having exempt employees record their work time.

For instance, one consideration might have to do with the federal Family and Medical Leave Act. If an employer does not keep accurate records of the hours worked by exempt employees, then, in any dispute about whether such an employee has met the FMLA’s 1,250-hour threshold, it will be the employer’s burden to demonstrate that the employee failed to do so.

Article Continues Below

Some employers require exempt-employee timekeeping in order to monitor attendance, that is, to know whether the employee worked his or her full schedule. This purpose might also be adequately served by an attendance sheet calling for entering checkmarks or some other short attendance-focused entry, instead of by detailed timekeeping.

Others are motivated by a desire to have a record of hours worked if there is ever a dispute about whether the person actually met the applicable exemption requirements. Keep in mind that how valuable these records will be when it matters will depend on their accuracy, which necessitates management’s rigorously and consistently enforcing its timekeeping policy for these employees. Moreover, having such records will not lessen the importance of making wise, well-founded exemption decisions in the first place.

The bottom line

As this shows, there is no single, all-encompassing answer to whether an employer “should” keep records of exempt employees’ work time.

Instead, management must first take stock of all of the relevant considerations (including other applicable laws besides just the FLSA). It must then evaluate whether and how its aims will be accomplished by whatever time keeping practice it is considering.

This was originally published on Fisher & Phillips’ Wage and Hour Laws blog.

John Thompson is a partner in the Atlanta office of the law firm Fisher & Phillips. His practice focuses on wage and hour law, assisting employers in preventive efforts designed to ensure compliance, and he handles both investigations conducted by government agencies and litigation in the wage and hour area. John has served as a Special Assistant Attorney General for wage-hour matters for the State of Georgia. Contact him at jthompson@laborlawyers.com.

Topics

8 Comments on “Should Employers Keep Time Records For Exempt Employees?

  1. I’m an exempt employee. But I don’t understand why it’s legal for me to have to work 65+ hours a week with no additional pay, while I get DOCKED if I work less than 40 hours a week. If I’m exempt, shouldn’t I get the same salary regardless of how many hours I work? I mean – if I take time off, I have to use “paid time off” which is limited to X number of days per year, but if I work 70 hours in one week, I don’t get any additional pay. If my salary is $X dollars per year, should it matter whether I work 65 hours one week and 30 hours the next week?

    1. In order for an employee to be considered exempt, he or she must be paid on a SALARIED basis, meaning the employee’s salary must not be subject to reductions based on hours worked. By docking the employee’s pay the employer is treating the employee like an HOURLY employee & has jeopardized his/her exempt status.

    2. Actually discus, you should be keeping track of all the hours you work even though you are an exempt employee. Do the calculations of how much you make by dividing your salary by your yearly salary and then calculate it by the hours you worked. I bet you will find that you are getting paid less than the hourly workforce. If you find out your hourly pay then it is up to you to either communicate it to your boss or look elsewhere. If your salary is at the high end for your trade then you may want to look either look into finding a job where they will pay you for the same with less hours or talk with your boss to see if he could eliminate some of those hours you are putting in.

      The only way to get away with being an exempt employee is by making decisions on behalf of the employer, and for at least 50% of the time. If you are truly a salaried employee they cannot dock you for weeks less than 40 hours. When you signed your job offer it should have told you your monthly salary. That is a contract until you either leave voluntarily or get terminated. As for PTO, there really shouldn’t be any as paying you for time off would be increasing your pay. Usually in a salaried position they give you an allowance of days off. It would be in your best interest to use all of your days off and even your vacation or else you will lose them at the end of the year and basically be working for free those days.

    3. If your employer is docking your pay in less than full day increments (i.e. docking you if you work a half day), the employer would lose entitlement to the administrative/professional exemption. You should speak to an employment attorney in your state to see if you might be entitled to recover unpaid overtime.

  2. Several of my former employers had exempts track time on projects, ostensibly to determine actual hours to achieve milestones. Not obvious if or how the information was used.

  3. Time tracking should be an essential part of each business especially because it helps bill the employees accurately. It shows the actual number of hours worked during the day, week or month as well as the productivity level. My company uses TimeCamp and we’re really satisfied with the results.

Leave a Comment

Your email address will not be published. Required fields are marked *