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May22

Exempt Employee who has exhausted PTO

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In South Carolina we have an IT Manager that has exhausted all their PTO time. We have counseled him on 2 formal occasions about reporting his time and the fact that he must be in the office during operating hours. He was tending to take mornings off or leave several hours early in the afternoon to the point where is became an issue. The question is, since we can not change him to non-Exempt or hourly based on classifications, can we dock his pay for any additional time out of the office he is taking? Ultimately, I know what the final result will be if this persists however, I want to ensure compliance in interim actions.

First of all, one of the assumptions in your question is invalid. Under the federal FLSA or Fair Labor Standards Act, an IT manager *can* be exempt. But there is no law that any employee *must* be exempt, ever. Even the CEO could be paid on an hourly basis, if a company chose. It is always legal for an employee to be paid on an hourly basis, as long as the change is permanent.

So one option would be for you to switch this employee to exempt status. This would only work if he is the only IT manager, or if his position is significantly different from others in your company. It also would not solve the performance issue — he would be free to come and go as he pleased, but earn less.

As an employer, you can establish expectations about the number of hours that an exempt employee must work. If the exempt employee works fewer hours, you cannot dock his pay. (If he misses one or more full days of work for illness or personal business, under some circumstances you can dock his pay.) However, you can and certainly should discipline or terminate him for not working the number of hours the employer expects, or other performance problems.

It also sounds like you allow exempt employees to come in late or leave early, but there are no formal guidelines. This employee is pushing the limits, coming in 4 hours late instead of 1 or 2 hours late. This employee needs more direction. You need to address this as a performance problem, sitting him down and giving him a specific number of hours that he must work each week, or specific hours when he must be at work each day. Some employees need for employers to set limits for them.

Frankly, this problem has gone on too long and you need to terminate this employee unless he fixes the problem immediately. If you do not have written warnings documenting this problem, start now. 

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This entry was posted on Friday, May 22nd, 2009 at 7:59 am and is filed under
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8 Responses to “Exempt Employee who has exhausted PTO”

  1. Kristin Says:
    May 22nd, 2009 at 8:27 am

    I have given the expectation of time in terms of hours i expect to see him in the office. So once the PTO is exhausted the only recourse I have is to not pay him only if he misses FULL days or to terminate him?

  2. Caitlin Says:
    May 22nd, 2009 at 8:36 am

    Hi Kristin! Your options are to continue to issue written warnings, or to terminate him. It may very well be that if you issue a “final warning” — letting him know that termination is the next step — the employee will mend his ways.
    Under the FLSA, if the exempt employee works even 10 minutes during the day, he must be paid his entire salary for the day. (If he misses one or more full days for illness or personal business, different rules apply.) Unfortunately, under federal law, docking his salary for partial days is not an option.
    There is one other option, though. You could suspend the employee, without pay, for a period of time. Usually, disciplinary suspensions are for 1 to 10 days. The FLSA permits an employer to suspend an exempt employee without pay, as long as there is a written policy permitting such suspensions in place — ususally in the employee handbook. HTH, and feel free to post any additional questions!~ Caitlin

  3. Kristin Says:
    May 22nd, 2009 at 9:46 am

    What about as far as tracking his time out by the half day? With the PTO I did require that he submit requests for the time out. We are pretty rigid when it comes to office time. Everyone is expected to be in the office when it is open. Was it Ok to use the PTO time in half day increments?

  4. Caitlin Says:
    May 22nd, 2009 at 8:58 pm

    Hi Kristin! Yes, it is okay to use PTO in half-day increments, as long as that is also how it is used for other employees.
    There is no employment law that requires that employers give paid time off or vacation time to workers. If the employer does offer this benefit, the employer sets the policies regarding it.
    If you required this employee to use PTO in half-day increments, but did not require other employees who took time off under similar circumstances to do the same, that might be illegal discrimination. But it sounds like this employee is the only one with an attendance problem. HTH, and thanks for reading the blogs!~ Caitlin

  5. Kristin Says:
    May 28th, 2009 at 2:15 pm

    Sorry, one more. What if the employee is out because their spouse is sick…that does not count as an illness or disability correct?

  6. Caitlin Says:
    May 30th, 2009 at 8:57 am

    Hi Kristin!
    Ah-ha! That changes everything. We assumed in our initial answer that the employee was just skipping work. Shame on us — a good employer always asks open-ended questions to learn more about the situation, before rushing to judgment.
    A spouse’s illness is not a disability and it does not qualify an employee to take sick leave in most states, including South Carolina.
    However, FMLA may apply if the spouse has a serious health condition. FMLA applies to companies with 50 or more workers within 75 miles. It allows employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period. Employees can use FMLA intermittently for a few hours if they need to. Pregnancy and a host of other medical and mental health problems are serious health conditions.
    Check the archives for info on FMLA. Under the 2009 regulations, as an employer you have 5 days after his initial absence for a qualifying reason to notify this employee of his FMLA rights. You can require certification of the spouse’s serious health condition. And, the time is unpaid — you ARE permitted to prorate this exempt employee’s salary, based on the number of hours that he works.
    Note that as long as the employee qualifies for FMLA, the employer must grant it, even if it is an undue hardship. HTH, and feel free to ask any additional questions!~ Caitlin

  7. Kristin Says:
    June 2nd, 2009 at 7:08 am

    Thanks Catlin, we are actually a VERY small company and FMLA does not apply for us plus the employee has not been here 12 months yet. The absences have not been related to the pregnancy thus far.

  8. Caitlin Says:
    June 2nd, 2009 at 7:49 am

    Hi Kristin! Good to know. In that case, the original answer stands. HTH, ~ Caitlin

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