Tracking exempt hours: Pros and cons
August 12, 2008 by Bill MeltzerPosted in: Absenteeism, Compensation, In this week's e-newsletter
Nowadays, the majority of employers use time clocks only for their non-exempt employees. After all, there’s no compensation difference for exempt employees.
Under FLSA, exempts receive their full salary no matter how many hours they work. But a growing number of firms say it pays to track exempts’ hours the same as those of hourly workers.
The No. 1 reason: productivity. Typically, employers either log attendance only for exempts or ask the employees to track their own hours on paper.
People usually log the same times every day for the sake of simplicity.
But it’s unlikely anyone arrives precisely at 8:30 a.m. and leaves at 5:00 p.m. on the dot, day after day.
Employers who’ve gone to the time-card system for exempts say they gain 10 to 15 minutes of productivity per employee every day. The-time-card system prevents people from starting unnecessarily early or staying late at off-peak hours.
Just as importantly, it helps curb excess breaks and long lunches.
OT-cost spillover
A second, related reason for tracking exempts’ hours: skyrocketing OT costs for non-exempts.
With the explosion of lawsuits tied to FLSA wage-and-hour laws, many firms err on the side of caution in counting hours and paying the necessary time-and-a-half.
To make up the gap, many try to cut hours worked by non-exempts. This also means greater reliance on exempts to stretch their own hours.
Expect resistance
If you’re thinking of cracking down on exempts’ hours, expect resistance.
Best practice: Give folks plenty of advance notice, explaining the need for the change. Usually, that helps reduce the grumbling and enables people to adapt.
August 12th, 2008 at 9:29 am
Well said. We’ve also noticed the same from our customers that implement a clock for exempt employees; increased productivity and number of late lunches being skipped.
TSheets is a simple to use time tracking application for everyone from small business owners to an enterprise wide solution.
http://www.tsheets.com
August 14th, 2008 at 2:09 pm
We are just converting to a electronic timekeeping system and incorporating all exempt and non-exempt. From the reaction I’m getting from the exempt, you’d think I was asking them to give up their first born. We’re moving forward, however.
August 14th, 2008 at 2:18 pm
We have always tracked ALL employee’s with timeclock. We use the average hours worked
to know if the employee’s are eligible to accumulate their vacation for the following year.
It also let’s management know that their front line employee’s are actually holding down
the fort for them! Like always, there are a few that push all the button’s. Also it feels much
better knowing that their is a consistency within the company and that all employee’s are treated
with the same set of rules.
August 14th, 2008 at 4:43 pm
Correct me if I am wrong? If you track exempt hours, doesn’t that take exempts out of their FLSA class? Basically if you treat an exempt as an hourly employee (i.e. tracking their hours), doesn’t that cause a problem to consider them as exempt employees.
August 15th, 2008 at 9:45 am
I am an exempt employee who works for a county government. I expect to be treated like an exempt employee, but my employer instead manages us like non-exempts. Instead of reviewing the quality and quantity of work produced, they only care about if someone is in his/her seat. My management has no clue what we do, even though we’ve tried to explain it and demonstrate multiple times. Like the pointy-haired boss in Dilbert, they really are clueless. The only thing they can manage is the time that someone is at their desk.
Management eliminated alternative work schedules (where the managers could have people work longer shifts/compressed work weeks as long as we were still covered during core business hours each day). They require us to use our vacation leave for absences as short as 15 minutes (e.g. if I schedule a dentist appointment over my lunch hour, but it will take about 45 minutes for the appointment and 15 minutes to get there/back). However, they don’t consider all the extra time employees put in coming to work early, or very often working late. This has led to an adversarial mentality sucha as “if management is going to charge me for 15 minutes of leave, then I’m not going to stay 15 minutes over.” with people showing up to work as close as possible to start time and leaving right at 5:00.
August 15th, 2008 at 4:20 pm
Maybe our workplace is deifferent than most, but we don’t see a need to log hours for most of our exempt personnel. We find that those who avoid that unpaid overtime like the plague, do tend to arrive and depart at fairly precise times everyday. Those that don’t are more likely the same that will be here for 45+ hours every week, so no one really watches the clock when they come and go! However, I can see how it might be an issue in other workplaces.
August 20th, 2008 at 4:23 pm
All of the classes I have ever taken on exempt classification guidelines clearly steer me clear from tracking my exempt employee’s hours. It is okay to make sure they attend work for the core hours needed in order to perform their job but to track how long they are at lunch or on breaks is discouraged. We simply look at employee performance. Are supervisors in the office at the same time as the employees they supervise? Are engineers available to the production staff when needed? Is IT available during core business hours and available by phone after hours?
I would look very closely at what allows an exempt classification before tracking time to ensure I would not lose the ability to classify the employee as exempt.
August 22nd, 2008 at 3:29 pm
Legally, you can track the time. You cannot dock time if the ee works less than 8 or 7 or whatever your day is.
September 30th, 2008 at 1:02 pm
Local School Employee Says:
I am an exempt employee who works for a school. My employer manages us like non-exempts. We are having to use a timeclock and we have to call-in when it is merely 30 minutes out(to be deducted from personal leave). I travel from campus to campus. They want us to clock out when we leave a building and clock back in when we arrive at our destination (work related travel). I have questions about Workers Comp covering us if we are in an accident while traveling and “off the clock.”
Our time is reviewed and hours counted each week to make sure we have our hours in(minus lunch and travel time is questioned). Of course it is o.k. to go over, but not a minute under.
Am I still exempt? It appears we are being treated hourly.
It seems like there is much time spent with worries about the time clock instead of where our time should really be spent.
Am I still exempt? How does workers comp work if we are asked to clock out for travel between campuses for work related errands?
August 4th, 2009 at 1:29 pm
time clocks are morale killers. how about treating people like adults instead of adolescents? if you have an employee that doesn’t work or is absent for hours how about talking to that employee and deal w/the issue instead of making people feel like they are being watched, not trusted and demeaned. by the way, people actually work less when they are not happy and feel watched. the #1 reason people stay at their jobs is not for $ or benefits but because they like their workplace. so if you are ok w/people leaving every 2 years and training new employees, then go for the clock. but in my opinion, that is way more expensive than any software could be saving you.
August 4th, 2009 at 1:30 pm
by the way sherrie, you need to leave that job.