HR Partners frequently has inquiries regarding exempt employees and managing their schedules. See below for a few of the most common questions and answers.
Can an employer create a specified schedule for exempt employees?
The Fair Labor Standards Act (“FLSA”) does not specifically prohibit employers from requiring exempt employees to work a particular schedule or to track the hours they work. The Department of Labor (“DOL”) has stated that employers may require exempt employees to work a specific schedule and to record and track hours without affecting their exempt status. 29 CFR Part 541. However, it is important to note that if you require exempt employees to work a certain number of hours and account for their work time on an hourly basis, you may jeopardize the exempt status of these employees if the accounting has the effect of treating them like hourly workers. This will likely create liability for overtime payment for the employer.
Will tracking time with a specified schedule risk an employee’s exemption status?
The DOL has allowed for hourly tracking of time for exempt employees. (See 29 CFR Part 541, “employers…may require exempt employees to record and track hours.”) However, this may only be done for purposes unrelated to employee pay (i.e., tracking to monitor performance, productivity, or billing to clients). The hours should be tied to job duties rather than strictly connected to starting and ending work times. Conversely, tracking hours and then adjusting the base salary compensation to match work hours would likely cause a loss of the exemption. If the exemption is lost, the employee becomes nonexempt and the employer will be liable to pay any earned overtime.
What options are available for an employer when an employee fails to meet the minimum hours of the employee specified work week?
An exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available (i.e., inclement weather). 29 CFR Part 541.602.
The relevant exceptions to this rule are as follows:
Other potential options for employers include a salary cut (not below the minimum exempt requirement), voluntary loss of exemption (this would require a balancing test), and as a last resort, termination.
Note: It may be beneficial to speak with the employee to determine why he or she is not meeting the minimum hours. If an employer has over fifteen (15) employees, the employer is subject to the Americans with Disabilities Act. If there is a situation that falls under this act preventing the employee from working the minimum hours, the employee may be entitled to reasonable accommodations.
For more tips on addressing employee schedules and the FLSA, please contact HR Partners at 785-233-7860. In addition, we would be pleased to assist you with any other HR matter your business may need guidance with.
Human Resources Officer
Kaw Valley Bank
"It gives me the peace of mind knowing that we have the support and expertise of Human Resources professionals just a phone call away through our collaboration with HR Partners.
I would definitely tell anyone considering working with the HR Partners team that they offer a wide variety of services tailored to the client. The HR Partners team assisted our Company with the revision of the Employee Handbook by customizing it to our needs and culture while ensuring it complied with federal, state, and local employment laws."