When it comes to issues of attendance management or putting an attendance management system to use within a business, there are some overall considerations to keep in mind. One of the biggest is how to deal with exempt employees’ attendance, tardies, and time-off.

A primary benefit of a leave tracker or an attendance management system is that it allows businesses to manage a complex set of leave policy guidelines in a centralized place. With that being said, there still have to be those policies in place, before anything can be managed.

The following is an overview of how exempt employees differ from nonexempt employees, and some key considerations employers should keep in mind when creating leave and attendance policies for exempt employees.

Exempt vs. Nonexempt Employees

There are some significant differences between an exempt and nonexempt employee. Many of the legal guidelines for employees are outlined in the Fair Labor Standards Act.

First, nonexempt employees under this law must be paid minimum wage as well as overtime pay for any hours they work beyond 40 hours in a week. The FSLA dictates that nonexempt employees are entitled to time-and-a-half of their regular rate of pay for overtime.

When an employee is accidentally treated as an exempt employee, or their overtime isn’t properly recorded and paid, they can file claims with the U.S. Department of Labor.

Most employees fall under the nonexempt category, including hourly employees.

So what are exempt employees? Exempt employees aren’t protected by the FLSA, so they don’t receive overtime pay. An exempt employee is someone paid on an hourly basis, someone who makes at least $455 a week, or someone who performs duties that are considered exempt.

Exempt employees perform high-level duties. These are divided into three categories, which are executive, professional and administrative. Someone who supervises or manages employees is likely exempt under the executive category.

Professional job duties include physicians, teachers, architects, registered nurses and employees who do jobs that require them to have advanced education, training or certifications.

Employees who are responsible for managing the primary support duties of a business are also exempt in many cases. This can include people who work in human relations, or individuals who manage payroll or accounting.

So, with all that being said, it can actually be easier to manage the attendance of nonexempt employees compared to exempt employees.

Attendance Problems with Exempt Employees

If a company has a leave management system in place, they may not even be using it track exempt employees’ time off, but they should. First, when an exempt employee is always late or regularly misses days, it can be incredibly frustrating to company leaders, managers, and other employees.

As an exempt employee, this person is making the same amount of money even if they’re late every day. However, dealing with attendance problems related to exempt employees is tough.

First and foremost, exempt employees have certain protections. They can’t make less than their assigned salary if they’re also giving up their right to receive overtime pay. An exempt employee has to have a regular, consistent salary, and that’s the case if they’re late every day of the week, or they’re there every day, and they stay later than every other employee.

For exempt employees who are chronically late, deducting pay isn’t an easy option. However, if an employee is regularly missing days, deducting from their salary may be an option in certain situations.

It’s also not an option to change the rules for just one employee. If you have one employee who’s exempt and chronically late, you can’t start making that person clock in and out without making everyone else do it.

The best thing to do is to create policies for all exempt employees or all employees within a department.

This is where it can come in handy to have an attendance management system in place. You can ask all employees, including all exempt employees, to track their time. This allows employers to see trends and patterns, and make more strategic decisions if they want to enact department or company-wide changes.

Once you have online time tracking and attendance management systems in place, you’re setting yourself up to be able to make other decisions. You may ultimately need the records and documentation gathered by the use of an attendance management system. Then you can start running reports, and you can have visible proof of why you needed to make the changes you did. This is important in case an employee ever tries to take legal action or say they were treated unfairly.

If an employer does start to see within the attendance management system that an employee is late every day or is missing large chunks of time, they can change them from exempt to nonexempt, but they will need to be able to prove why they did it since this can lead to a Department of Labor investigation.

Vacation Time

So, what about handling vacation time for exempt employees? All exempt employees should be made aware that they are eligible for vacation time. Most companies tend to prefer following an accrual system.

The SHRM provides a sample policy in which vacation is earned each week, in hourly amounts.

For example, employees can earn vacation time at a rate of 1.69 hours per week, starting from the date they’re hired to their fifth-year anniversary. Following this sample guideline from SHRM would put employees at about 11 days of vacation time per anniversary year. From there, the accrual rate goes up based on how long an employee has been with the company.

There are some other issues along with an accrual-based policy to consider. First, there is the consideration of scheduling conflicts. This is something easily addressed by a vacation tracker if your policy is first-come, first-serve.

Granting time off to the employee who first requests it is generally the easiest to manage. Some level of preference may be given to more senior employees, however.

Employers should also ensure that they address how employees should give notice they’ll be gone, and what happens with unused vacation time.