The Fair Labor and Standards Act (FLSA) requires that you pay all employees minimum wage and overtime. Some employees, categorized a “exempt”, are not subject to the same mandatory overtime payment as non-exempt employees. To qualify as exempt, an employee must be a salaried employee with a salary above a minimum threshold, their salary must not be subject to decrease, and their duties must fall within a category of work (including “outside sales”, or executive, professional, administrative roles).

Often, exempt employees have more flexibility in their ability to flex hours and are not required to clock in or out of work because of their hours worked is not the basis for their pay. Exempt employees who continually show up late or decide not to come to work, however, can be frustrating and harmful to your business. To resolve this issue, some employers look into requiring exempt employees to work specific set hours or clock in and out. Although FLSA does not prevent employers from implementing such systems, employers should use them carefully to avoid risking employees exempt status.

Requiring employees to clock in and out during set work hours is an acceptable practice if it is used for specific record-keeping purposes, including using data for informational purposes and disciplinary action. If an employer is using the data for disciplinary purposes, the employer cannot use it to alter the employees pay. Because salary-based pay is a primary requisite for an employee’s exempt status, docking pay as a result of tardiness or absence risks losing exempt status and owing the employee backpay for overtime hours they would not otherwise earn.

It is important that employers seeking to require exempt employees to clock in and out do so carefully. The attorneys at Simpson, Jensen, Abels, Fisher & Bouslog, P.C. are experienced in handling complex employment issues. If you have questions regarding exempt employee status, Contact us at (515) 288-5000 to discuss with our firm.

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