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Do I Need to Track Salaried Employees Hours?


Questions about tracking salaried employees’ time are quite common among businesses owners. The majority of these questions can be broken down into a few different categories:

  • Do I have to track salaried employees’ time?
  • Should I track salaried employees’ time?
  • How do I track salaried employee time?

Do I Have To?

Here is the answer in the best legalese I can come up with: it depends. Under the Fair Labor Standards Act (FLSA) businesses are not required to track exempt employees’ hours. By definition, exempt employees are not subject to overtime regulations. However, if an employees’ annual salary is less than $23,600 then FLSA states that they cannot be labeled as an exempt employee and must be paid overtime if they work more than 40 hours per week. While there are exceptions to these rules based on industry, education, and expertise, the basic rule of thumb is that if the employee makes less than $23,600 then their time should be tracked–otherwise it is not required. There are no legal restrictions preventing employers from requiring salaried employees to track their time, but in most cases it is not acceptable to deduct pay for hours not worked. However, there are always exceptions to any rule and the Department of Labor lists circumstances in which an employee may make deductions from pay.

Should I?

Most salaried employees make more than $23,600 per year; however there are still tangible benefits to tracking their time.

  • Employee accountability – Generally, salaried employees make more per hour than their hourly counterparts making it even more important that they are held accountable to put in the required hours to complete their responsibilities.
  • Accrued time tracking – Many salaried employees are eligible for vacation, PTO, and/or sick pay. It is much easier to manage time off if there is a time tracking program already in place.
  • Project tracking – By tracking the time spent on different projects business owners gain insights into the profitability of each project, and can more easily see where resources are being misallocated.

How Do I?

There are literally hundreds of different programs, methods, and systems for tracking employee time. Companies that are already effectively tracking hourly employees can add salaried employees to that system to maintain familiarity and uniformity within the company. Otherwise here are a few things to take into consideration.

  • Paper time cards – The most primitive solution but also the most affordable. Literally the only costs are the price of paper and ink to print them. Paper time cards will not provide insights into projects and dealing with accrued time negates most of the benefits of tracking time to begin with.
  • Hardware solutions – Biometric devices, card scanners, and punch clocks are all very popular methods for managing hourly employee time. They prevent time theft and are easy for employees to use. Purchasing additional hardware can be expensive and may not completely automate all the reporting needs your business has.
  • Employee time tracking softwareNo additional hardware will be required so long as you have computers available for employees to clock in and out on. Easily automate all of your time reporting to gain insights into project allocation and managing accrued time.

For most businesses the insights that tracking employee time provides will be an invaluable resource in making better business decisions.

Clayson S.

Author:

Author Bio: Clayson graduated with a Bachelors Degree in Statistics from Utah State University. He has been working at Hawkeye Technology LLC since Aug 2013. In the office he is known as the “Boy Scout” of customer service. He has an unhealthy obsession with the Utah Jazz. He still believes Michael Jordan pushed off, Derek Fisher lied and John Stockton is the greatest point guard ever.

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