Keeping records for exempt employees vacation time

KHS · April 2001

Does anyone have a good policy/process in place for keeping track of exempt employees vacation/personal time taken? We have a TIME OFF REQUEST form that is supposed to be completed and turned into payroll when time off is taken but ensuring that this is done and that we have accurate records is becoming a full time job!

It is a "front and center" issue right now since we are at the beginning of the year and are trying to accurately determine rollover amounts. Any suggestions?

Sherry · April 2001

We require that all employees who will be out of the office for 2+ hours must fill out and "Out of Office" form and give it to the receptionist, so that she knows who is here and who is not here for telephone purposes. She then turns them in at the end of the day to HR. If the employee is out for personal reason more than 4 hours a Personnel Action form is submitted for PTO time. Works for us. And Manages like it.

cg · April 2001

We're a small company but I also found
that my keeping track of people's time
according to their written requests was
not efficient. A simple method we just
instituted - distribute a monthly calendar
with a key that represents the types of
time off, ie O on site V vacation, etc.
You collect them periodically but you
can give people a little extra incentive
if you tie the calendar return to payday
and/or the distribution of their payroll
checks.

Margaret Morford · April 2001

Be careful in keeping track of exempt employees time, that you are not allowing them to take paid time off, sick time, vacation, etc. in less than full day increments. Otherwise, you lose the "exempt" status for these employees and owe them time and half for any hours worked in excess of 40 hours. Very expensive policy mistake!

If you have any questions about the loss of the exemption, call me at 615-371-8200 and I'll go over it with you.

racinway · November 2002

Could you please clarify for me - I've done a great deal of research on this and am receiving much conflicted information. Can exempt employees take PTO in less than full day increments?
For example: Joe wants to leave at noon today. He came in at 8 am. Can he submit a PTO request for 4 hours (to be paid out of his PTO account) or MUST he be paid for the day as if he were here, and can only be charged PTO if it is in 8-hour increments (full-day).
I've found many items stating we can charge a partial day off if there is a benefit (such as PTO/sick time) that would pay the difference- so that the salary isn't changed. These articles also say that if they have no benefit left, then they must be paid in full, as if they hadn't taken the time off. If such is the case, then it appears that the person with a PTO balance is penalized, and must use that balance whereas the one with no balance has no penalty. He's only penalized if he has no balance and takes a full day off.

And I've found many articles, such as your message board response, which says exempt employees can ONLY take PTO in full day increments. As you are what I'd consider the HR queen, could you direct me to a legal document which contains the correct answer.
Many, many thanks!

dhnyct · April 2001

Each exempt employee is responsible for tracking their own time off. Trouble is not everyone uses the same standard, and upper management is reluctant to support my proposal for a consistent plan.

How do you account for those who arbitrarily take a day off now and then just because "I've put in a lot of hours lately"?

And then how am I to determine when someone has exhausted available leave in situations of FMLA, STD, etc.???

dhnyct · April 2001

HELP...I really need to know how others deal with these issues!!!

WO · April 2001

You do need a consistent policy. If you are a private employer a good guideline is to use leave banks for absences of a full day or more.

We are a public employer and require use of leave banks for absences less than a day, with an understanding that if they are here for the greater part of the day leave is not necessary.

I realize there are recent court decisions for a private employer which may require that I change our policy to docking leave banks only for absences of a day or greater. I'm struggling with making this change due to public accountability.

Any other public employers out there with suggestions?

Granhel · July 2001

We have a process whereby the exempt employee signs a payroll sheet at the end of the pay period indicating how many days worked and the "Time off request" is matched to the payroll sheet (sheet is for all employees - small company). The accountant makes sure that the employee's signature is on the payroll sheet before releasing the person's check (good auditing practices).
However, if the person does not work a day and does not request the vacation or sick time off in advance, or indicate they were off on the payroll sheet, we really do not know about it. If you have a dishonest employee, oh well? I don't have a good resolution for that. I believe that given enough rope, a dishonest person will eventually hang themself.

franfields · July 2001

We have a time off policy which does not distinguish between sick and vacation. Each employee is given a bank in the beginning of the year from which to draw. If the employee plans the time, they submit a request for time off. If the absence is unexpected, they email HR. It is also recorded on timesheets (# of hours worked on a given project or client) since we are in a billable hour business and we can reconcile against that if they note a block of time as personal time off. Our policy states that we will track in half day increments against their bank and the employees sign off on that.

We still find there are folks who don't own up to haven taken time off and that is a problem, especially in the exempt ranks since we do not enforce hours of operation, although we make it clear what our office hours are.

CuriousG · July 2001

>We have a process whereby the exempt employee signs a payroll sheet at
>the end of the pay period indicating how many days worked and the
>"Time off request" is matched to the payroll sheet (sheet is for all
>employees - small company). The accountant makes sure that the
>employee's signature is on the payroll sheet before releasing the
>person's check (good auditing practices).
>However, if the person does not work a day and does not request the
>vacation or sick time off in advance, or indicate they were off on the
>payroll sheet, we really do not know about it. If you have a dishonest
>employee, oh well? I don't have a good resolution for that. I believe
>that given enough rope, a dishonest person will eventually hang
>themself.

Where are your Supervisors and Managers in this process? Are they not held accountable for controlling their payroll expenses. Do they know when their employees are at work and when they are not?

Not only should each employee be required to sign off on a paysheet, but their immediate supervisor should also sign off. This should include a certification that this is an accurate accounting for time worked and time off during the pay period. I emphasize to my employees, managers, and supervisor's that a time sheet is no different than an expense report-and falsification of either one is a theft from the company.

no1son · July 2001

Our Time Recording Policy states: Salaried (Exempt) - This classification consists of supervisors, managers and professionals. These persons are considered to be key to the operation and management of the Company. Their work is directly related to management policies and the general business operations of the Company and our customers. They must exercise discretion and independent judgment in the performance of their positions. ATTENDANCE REPORT SLIPS denoting VACATION TIME will be submitted to the H. R. Department on a weekly basis by the department manager. All other absences, late arrivals, or time away from the premises (including lunch periods) must be reported immediately to the Receptionist.

Note: Since our Receptionist area reports to the H. R. Department, those records are compared to the Attendance Report Slips submitted by the managers. If there are discrepancies, they are cleared up. And if there appear to be areas of concern, those are also brought to the attention of the manager for addressing. Also, our AUDITORS require reports on accumulated, accrued and used paid time off. Thus, the managers are made aware that their reports are used as important documentation for other purposes required by the Company.

memiller · July 2001

We are a small company. Exempt employees must e-mail me (HR Mgr)if they were late or are leaving the building. I keep a hard copy of the e-mail in a file marked "Personal Time" and also document the time missed on an excel workbook. There is an individual worksheet for each exempt person where I log the date, reason (sick, personal, etc)and the amount of time missed (this column automatically totals the hrs). A few managers who are having physical problems and are periodically needing more time off have worked extra hours, which I mark down in a different column. Example: Date: 1/26/01 Reason: sick Hrs. Missed: .50 (1/2 hr) Made up: 1 hr.

We do not dock for any time off. However, excessive time off is discussed during their performance evaluation and taken into consideration when calculating bonuses.

Vacation is handled separately. All employees complete a Vacation Request Form and I have a database to keep track of total days available, days used and remaining days available. Our receptionist handles this and also logs the days onto her calendar so she has track of who is here.

Hope this helps!

Don Avery · July 2001

[font size="1" color="#FF0000"]LAST EDITED ON 07-18-01 AT 12:30PM (CST)[/font][p]In my humble, non-legal opinion, you appear to be coming very close (if not there already) to jeopardizing the Exempt status of these employees due to the fact that you attend so closely to time "lost" and penalize them with a lower bonus if they lose too much time. The latter effectively varies pay by the amount of time worked, which is a red flag to the W&H people if someone ever complains. It might be prudent to check with a labor attorney as to the advisability of this practice.

memiller · July 2001

Thanks for your input. I did check with a few labor attorneys and received the following comments:

"Yep. As long as the hours worked are not used to "dock" the employee, you're OK. Tracking the time to monitor abuse of a new program or attendance tracking are good reasons to keep track of exempt employee's time. You just can't use that data as a basis for their pay. (Bonuses are optional)"

"You can track personal time off however you like. The problem arises when the PTO allotment is exhausted and the salaried employee gets docked". (We don't dock their pay.)

"If you allow and track the usage of PTO, as long as you don't change the amount of the salary paid and find other methods of discipline or corrective action, the FLSA is not involved at all. There is no FLSA regulation concerning enforcing an attendance policy for salaried employees as long as it does not involve changing the weekly amount based on hours worked (note: Some states will allow an employer to NOT pay for any day in which no work was performed). A salary is a payment method, not a free pass to come in late, go home early or take unlimited time off. Track what you wish, how you wish to track it, as long as your consisent among your people. It's the action you take that can cost you an exemption, if it affects the employee's pay. This does not include bonuses."

Don Avery · July 2001

It appears that you are certainly doing due diligence in protrcting your Exempt classifications but I do disagree with one of your statements: "Salary is a method of payment........". In the context of Exempt classification I believe that it is more than that. It reflects the concept that an Exempt employee is paid for the job and not for time spent on the job. That doesn't mean, however, that the employee can make up their own hours, but that small amounts of time are not important.

CuriousG · July 2001

>It appears that you are certainly doing due diligence in protrcting
>your Exempt classifications but I do disagree with one of your
>statements: "Salary is a method of payment........". In the context
>of Exempt classification I believe that it is more than that. It
>reflects the concept that an Exempt employee is paid for the job and
>not for time spent on the job. That doesn't mean, however, that the
>employee can make up their own hours, but that small amounts of time
>are not important.

I hear what you are saying, however, the original quote is correct. "Salary" is simply a method of payment. Like you, I have used the explanation that "salaried employees are paid for the job, and not the time spent on the job." However, that statement merely states the philosophy behind paying a salary, not the definition of of the practice. I guess we just use the terminology so much, it becomes our own "tech-speak" definition.

I have worked for employers who had a "Salaried-Nonexempt" classification. This meant that we paid our non-exempt (nonunion) administrative staff a base salary every week for the first 40 hours worked. If the employee worked over 40 hours, we paid them an overtime premium based upon the weekly salary divided by 40 hours.

lasiter · July 2001

I work for a public employer also. We have had problems with exempt employees abusing the system in the past. They wanted to come in late, leave early, etc. They, themselves, kept track of every little bit of time they worked over the normal work week (very little, in fact) so that they could take off an equivalent amount of time when they wanted to. They got to where they didn't want to account for any of the time they were away from the office, and got insulted when you asked them. The exempt professional and administrative employees, in many instances, work alongside non-exempt employees and this was causing morale problems you would not believe. Therefore, the City instituted the following policy for public accountability purposes:

At no time is an exempt employee's salary docked. If an exempt employee is abusing the system, they receive disciplinary action other than docking. I think that if they commit a major safety violation that under the FLSA they can be disciplined by unpaid suspension if necessary, but we have never had that happen.

All our employees, exempt and non-exempt alike, accumulate unlimited paid sick leave, generous vacation leave and personal leave based on years of service. All time that exempt employees spend away from the office on other than city business, whether planned ahead or unplanned, is charged against the appropriate leave bank. To keep track of this, the employee is required to complete a request for paid leave slips either before (planned leave), or after they return to work (unplanned leave).

All city employees are prohibited from leaving the work place (other than for lunch or personal hygiene purposes), without the approval of their supervisor. They also have to notify their supervisor when they arrive late in the morning or when returning from lunch.

This system of charging time not worked to the leave bank has been ok'd by our City Attorney and so far, seems to be working. We still have the problem of exempt employees wanting equivalent time off for every minute they work over 40 hours though. Any thoughts on how to handle this?

Palbeck · July 2001

We use biweekly timesheets to keep track of our hourly employees. I ask exempt employees to fill out one of these timesheets in the event that they take any benefit time, whether it be vacation or sick/personal, during any given payperiod. All they log on this timesheet are the benefit hours that they have taken - not hours worked. In other words, the only time I receive a timesheet from salaried employees is when they are logging any time other then hours actually worked. That way, I enter it into payroll under the appropriate hours category and it is charged off in payroll from their bank of time. This amount then appears on the paycheck stubs of both hourly and salaried employees. We can then generate a report that shows both the amount of time taken and the amount used. Don't know if this will help you or not since much of this is driven by the payroll system we use. We have worked long and hard with our payroll company to make this happen.

In regards to logging anything under 8 hours, I have logged all time regardless of the amount. I continue to be confused re: this as there seems to be so many schools of thought on this. During a recent seminar I attended, at which the presentor was a labor lawyer, I was told that you could draw any amount of time increments from an exempt employees time bank as long as you didn't dock them or affect the $ amount in any way. Any feedback on this would be appreciated.

Keeping records for exempt employees vacation time

Comments