Wage & Hour Law: Must exempt employees fill out time sheets?

07/30/07

Question: Do exempt employees have to turn in time sheets to the payroll department? How do exempt employees inform the payroll clerk of vacation and sick time taken? Answer: According to the Fair Labor Standards Act (FLSA), an employee must be paid on a salary basis to be considered “exempt” under the white-collar exemptions applicable to administrative, professional, or supervisory workers. This means that an exempt employee must receive his or her full salary for any workweek in which he or she performs any work without regard to the number of days or hours worked.

Exempt employees may keep time records for purposes of meeting requirements for allocating salaries and still not conflict with FLSA requirements, as long as these time records are not used as the basis for pay. Example: An employee's salary is drawn from the budget of two different departments, so it's important to know how to relate salary expense to one budget or the other. Tracking the hours for other reasons might destroy the exemption, making you liable for back overtime and taxes.

It is also important to make sure the employees you are treating as exempt truly meet the FLSA's criteria for exemptions. Moreover, some of the exemptions under the FLSA are only partial exemptions that require the employer to maintain time records even though the employees are exempt from minimum wage or overtime.

You should also implement a system by which your exempt employees can notify payroll of their time off, such as sick or vacation, so that this amount can be deducted from their paid-time-off bank. According to the U.S. Department of Labor, it is permissible to do this, as long as an employer has a bona fide vacation and sick-time policy and exempt employees otherwise receive their guaranteed salary.

G.Neil offers many products to assist with your time-tracking needs:
Fast Answers for People Managers: Time & Pay
FLSA Compliance Kit
ComplyWare FLSA