Posted on 01-Mar-10 by The Timekeeper

OK, so let’s say you’ve got an exempt employee, and they’ve got a problem with getting to work on time. Your workplace isn’t one of those where people are allowed to set their own hours, so you’re understandably frustrated… but what can you (legally) do? For instance, can you dock their pay when they’re late?

Well, turns out, the answer to that question is “no.” While you can dock the pay of hourly or non-exempt salaried employees when they come in late, take a long lunch or leave early, you can only withhold pay from salaried exempt employees under certain conditions — and usually only in full-day increments.

Dock an exempt employee for a partial day, and you risk having their exempt status revoked, and finding yourself liable for paying them overtime… and not just the one employee, but all other similar exempt employees in your organization. See, employment law doesn’t allow a “head’s I win, tails you lose” scenario. You can’t classify somebody as exempt (so you don’t pay them when they work overtime) and simultaneously dock their pay when they work a few minutes less than a full workday on any given day.

Generally speaking, if a salaried exempt employee works any part of a day, even if it’s just for a few minutes, you have to pay them for the full day. That’s why it’s so important when you’re using unpaid furloughs to cut expenses to make sure all salaried exempt employees are strictly prohibited from even checking their voicemail or business email while on furlough. Even a brief spin through their company email inbox once during a day could leave you liable for paying them for an entire day of work.

You’re not powerless, though. You are permitted to have attendance rules for your workplace and to discipline the employee for punctuality issues (of course, within any constraints placed on you by whatever employment contract might apply, if any). So, for instance, you can follow the usual progressive discipline process just as you would for any infraction of workplace rules. Depending on your state law, in some cases you may be able to suspend the employee for one or more full days without pay or even terminate them. (Although I’d say you probably don’t want to do that unless the problem is exceptionally severe.)

If you find yourself facing this kind of situation, don’t try partial-day docking with exempt employees… but by the same token, don’t give up and assume you can’t do anything. Check with your labor law attorney to make sure of what you’re permitted to do.

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