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Jan27

Can I have a salary employee clock in and out like the hourly ones?

Good Morning,

I am an office manager for an Endocrinologist and our Physician Assistant wants to be compensated for extra time she spends in the office. I told her the only way for me to know exactly how much time we are talking about is if she starts clocking in/out. I have everyone else on a smart clock. They clock in/out but her. I suggested for her during our meeting to start clocking in/out. Therefore, she gets compensated for that. I need to know for sure how much time we are talking about. She told me asking a salary employee to punch in/out was insulting. Our practice in located in central Florida and I have done some research on line and I do not see any law that prohibits me as an employer to have her to clock in/out. Could you please expand on this and tell me if I am able to establish this system with her?

Any information you can provide me with will be greatly appreciated.

Thank you in advance.

Sincerely,
Erika

Yes, we can expand on this. There are  a number of issues in your post, so this is rather lengthy. What you are requesting is reasonable, but it may also raise additional issues. The short answer is: it is completely legal to have a salaried employee clock in and out, but unwise to pay her additional for weeks when she puts in additional hours. Doing so may permanently make her an hourly employee.

First, a salaried employee can be either exempt or non-exempt — but most of the time, when someone says “a salaried employee” they mean “an exempt employee.” Exempt employees are never entitled to overtime or additional pay when they work additional hours. An exempt employee is paid a flat salary for all hours worked during the week, whether that is 20 hours or 80 hours per week. Not every employee can be exempt. The federal FLSA, permits an employer to treat certain categories of employees as exempt. Usually a Physicians Assistant qualifies as an exempt salaried Professional under the FLSA.

The federal FLSA requires an employer to accurately track hours worked for non-exempt (hourly) workers. There is no requirement that you track hours worked for exempt employees — but nor is it illegal or unethical to do so. Some companies do require exempt employees to clock in and out, just so they can monitor the hours worked. We disagree with the PA. If she is complaining about working a high number of hours, it is irrational for her to feel insulted when you ask her to clock in and out. Obviously, if you are going to consider raising her salary based upon a heavy workload, you need to know what that workload is.

Be very cautious about paying this employee more when she works additional hours. When an employees wages vary depending upon the number of hours worked in the payroll week, the employer is treating the employee as non-exempt. When you treat an employee as non-exempt, they become non-exempt permanently — and entitled to overtime at 1.5 times the employees average rate for the payroll week.  So if you pay this employee more this week because she worked 60 hours, she is no longer an exempt employee.

Note that simply tracking the number of hours that the employee works does not make her non-exempt — but varying her salary based upon hours worked does  make her an hourly (non-exempt) employee. Still, you should avoid possible discrimination by treating all the PAs alike, if there are several in the same office.

As an employer, you can establish minimum expected work hours for an exempt employee. There is no expectation that an exempt employee will work only 40 hours per week. Many employers require exempt employees to work 50, 60 or even 80 hours per week, and in a few cases, more. This may be a simple miscommunication. The PA may be assuming that she is being paid for a 40-hour week. In reality, most employers expect exempt employees to work “whatever it takes” to get the job done.  Again, there is no additional compensation over and above the weekly salary, for an exempt employee who puts in additional hours.

As an employer, you also have the right to change the work hours expected of an exempt employee. For example, she may have been hired with the expectation that she would work 40 hours per week. However, now the practice is busier (or staff has been reduced due to a soft economy) and she is working 48 hours per week without any change in salary. This is legal, and it is a situation the majority of exempt employees have faced in the past 3 years.

Sometimes an exempt employee will be called upon to do extra work when a colleague is on vacation or ill. Again, the exempt employee is not entitled to additional payment when this occurs — even if she works 60 or 80 hours per week, rather than 35 or 40 hours.

If the PAs job duties have significantly and permanently expanded since she was hired, or if she is working many more hours, then you may make a decision that her salary should be adjusted accordingly. For example, if the practice has expanded and she  is now working twice as many hours, you may want to increase her annual salary by $10,000 to $15,000. However, for the employee to remain exempt, this increase would need to be permanent — not intermittent, based upon hours worked.

The conclusion is that it is lawful and reasonable for you to have this employee punch in and out. In fact, it is wise to track the hours worked by every employee and is not insulting. However, it would be very unwise for you to vary this exempt employees wages based upon the number of hours worked in the payroll week. Doing so would make her an hourly employee. A better tactic is to tell the employee that the extra hours she is working will be tracked, and considered with her total performance when annual evaluations are done. At that point, an increase in salary will be considered.

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This entry was posted on Friday, January 27th, 2012 at 6:09 pm and is filed under
Compensation, Human Resources Management.
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2 Responses to “Can I have a salary employee clock in and out like the hourly ones?”

  1. Susan Haddix Says:

    May an employer require SOME, but not ALL exempt employees to clock in and out?

  2. hrlady Says:

    Hi Susan,
    The FLSA doesn’t require employers to track hours worked by exempt employees but doing so is not prohibited either. There are no regulations stipulating that employers must track hours worked for all or none exempt employees. It’s good practice to enforce a policy of clocking in/out to all employees not just some. However, doing so can be justified. For example, a company may need to track the hours worked by exempt employees in a specified department in order to bill a client appropriately. Consider why the company would need to track hours worked for only some employees. If it’s a legitimate business need, document it. Otherwise, uniformly and fairly applied policies are the best option.

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