on July 08, 2016 Common Questions

What Does the FLSA Say About Clocking In and Out?

Common customer question #5 Does it violate the FLSA to require a salaried, exempt employee to clock in and out? No, it doesn’t violate the FLSA to have an exempt employee clock in and out. However, I would recommend that an employer have a business reason to track an exempt employee’s hours. For example, an employer may opt to track an exempt employee’s hours for purposes of client billing, grant tracking, intermittent FMLA leave or sick leave, hours-based benefits calculations, or paid time off benefits.

Clocking in an out

Should you choose to track the hours of your exempt employees, you’ll want to be careful about how you use this information. Keep in mind that while you can hold an exempt employee to a schedule, the FLSA’s salary basis test states that these employees are paid a set salary no matter how many or few hours they work. Reducing an exempt employee’s salary based on hours worked may result in the loss of the exemption, a wage and hour claim from the employee, or even a DOL audit. Pay may be reduced in certain circumstances, however, such as a full-day absence for personal matters, or a full-day absence for sickness if a bona fide sick leave plan is offered and the employee has already used all of their paid sick leave. 

With the FLSA exemption changes due any time now, we recommend that employees who may become non-exempt start tracking their time. We think it will be useful for employers to see the number of hours each employee works so they can compare the cost of keeping them exempt (which may require a raise) versus paying them overtime if they continue to work the same number of hours after being reclassified as non-exempt.

FLSA Guide

Paul Hardin

Paul Hardin is President of Moulton & Hardin, Inc. As an expert in both Employee Benefits and Workforce Management, Paul studies the relationship between all aspects of Human Capital Management, with an emphasis on Benefits Management, ACA, and how an HCM platform is invaluable for employers.

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