It can be unnerving when exempt employees, who are paid a set salary, are chronically late. An employee could be 15 minutes late each day for a week and receive the same paycheck as someone who works the whole day. Unless the employee is able to make up for the lost time at the end of the day by staying late, that’s just not fair.
Unfortunately, your options for dealing with attendance problems is not as straight forward as you might think. You can’t dock the pay of a salaried worker and you can’t always just switch them over to non-exempt either.
Don’t Discriminate and Don’t Dock Pay
Your inclination might be to dock the employee’s pay or setup different rules for the offending employee, but this might come back to haunt you later in the form of a lawsuit.
Docking pay for exempt employees
With exempt employees, you have to be careful how you deal with the tardiness problem because you can’t just dock employees’ pay when they’re late. They make their salaries regardless of the number of hours they work. Exempt employees are protected from making less than their assigned salary since they forfeit their right to overtime. Their salary must be consistent regardless of whether they only show up for an hour a day for the whole week. As long as they make it in to work, they need to be paid for the day.
There are a few exceptions to deducting pay for salaried employees but being late isn’t one of them. In general, they would need to be gone for an entire day or week to qualify.
Discriminating against employees
You could get into legal trouble if you discriminate against one employee. It might make sense to you to require just the offending employee to clock in and out, for example, so that you can monitor the employee’s behavior. But if you don’t make it a company-wide or department-wide rule, it can look like discrimination.
If you want to make some rule changes, make them for the whole department. Implementing time tracking policies for salaried employees to track accountability is fine. Just make sure it’s a policy across the board and not a rule for a single employee.
How to Switch an Employee from Exempt to Non-Exempt
Switching an employee from exempt to non-exempt is a time consuming process. It may be too much trouble to go to for one employee with a tardiness problems. However, if you decide the trouble is worth it, make sure to switch employees from salary to hourly carefully.
To make the switch, an employer would need to begin paying the employee on an hourly basis, examine the FLSA guidelines on exempt employees, and re-write the employee’s job description.
Be aware that reclassifying employees can trigger investigations by the Department of Labor.
Deal With Tardiness Legally
The best thing to do in this situation is to implement online time tracking for the whole department. With accurate record keeping, you can start documenting the number of times employees are late and you can run tardy reports that clearly show the offenses.
Once you have records, you can discipline the employee. If the problem persists, switching the employee to hourly or termination are options.