What Can an Employer Do If an Exempt Employee Fails to Work 40 Hours?

by Evil HR Lady on April 15, 2015

We have a relatively new (4 months) office manager who supervises others. She is our highest paid employee in a 15-person office. Company policies state a 40-hour work week.

We understand the exempt laws and having to pay full salary even if they do not work a full day, and so forth. Since her hire, she has not worked one bi-weekly pay period where she wasn’t short up to 10+ hours a pay period.

To date, her performance for what she completes is good. However, there is a lot of work to be completed that is her responsibility. Most of the time, she is working short days, so it appears we can’t dock her PTO unless it is four hours or more? The CEO feels like he is being ripped off and other exempt employees who are putting in more hours are noticing.

The CEO is concerned about how to handle this issue with her as an exempt employee. He feels that she is the right person for the job with the exception of taking advantage of work hours. (It is clear that she understands the exempt law/pay status.) Any suggestions would be very much appreciated.

To read the answer to this question, click here: What Can an Employer Do if an Exempt Employeee Fails to Work 40 Hours? 

{ 16 comments… read them below or add one }

David April 15, 2015 at 2:23 pm

Nice navigation of nuanced waters

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Evil HR Lady April 15, 2015 at 3:27 pm

Thank you!

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Jeanne April 15, 2015 at 8:08 pm

You are right. That’s the deal of the century. It’s sad they let it go on for that long. Other employees notice this sort of thing and it lowers morale. They have to work 40 hours or more and this person gets to leave early. But it’s never too late to address the problem.

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Anonymous April 15, 2015 at 11:12 pm

I agree with the answer – hold her accountable after communicating expectations. Of course, you can always make anyone nonexempt and pay the employee hourly, even a CEO, but that would be the passive aggressive way of dealing with this situation when focusing on her specific issue is more direct (and then you don’t have to worry about overtime, all those meal and rest break, and clock issues).

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Camellia April 16, 2015 at 8:13 pm

Hmm, I don’t think you can make just anyone non-exempt, I think that is defined by law.

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Evil HR Lady April 16, 2015 at 8:29 pm

You can. You can legally pay ANYONE by the hour. If you choose to do that, they are overtime eligible.

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Anonymous April 17, 2015 at 1:00 am

Yep. The default is nonexempt — meaning all the wage and hour laws apply normally (overtime, meal and rest breaks, etc.). If you want someone to be EXEMPT from those laws, then they have to meet certain criteria (but again, that’s if you WANT to exempt them from overtime, etc.) If you don’t, you don’t have to.

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AggrAV8ed Tech April 16, 2015 at 1:59 pm

I had an exempt coworker who got away with regularly working about 25 hours a week AND our boss still granted him EXTRA vacation time.

My workplace puts the fun in dysfunction.

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HarshMarsh April 16, 2015 at 8:10 pm

GREAT article and great advice! Amazing what people can try to pull sometimes. Every time I think that I could have no more surprises in HR, someone proves that wrong!

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Horse Tense April 17, 2015 at 2:44 pm

Quick follow up question, somewhat in the spirit of this topic:

If a legally exempt employee is suspended from working for what the company calls a disciplinary reason for 3 days, but worked the other 3 normally scheduled days that week, can the employer dock pay?

I was under the impression that only PTO could be docked in that circumstance, not pay and hope I am not mistaken. The person who had this exempt employee suspended seems to think the suspension would result in a financial penalty as it would for a non – exempt worker, and may retaliate if they discover it was an unexpected vacation instead.

I ask, because I don’t know whether to advise my friend to ignore or fight this. We have yet to see the pay stub.

If you see this Evil HR Lady let me know!

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Evil HR Lady April 17, 2015 at 2:53 pm

Yep. You can suspend without pay. FLSA guidelines specifically say this:

Under what circumstances can an exempt employee be suspended without pay?
An employer may impose in good faith an unpaid suspension for infractions of workplace conduct rules, such as rules prohibiting sexual harassment, workplace violence or drug or alcohol use or for violations of state or federal laws. This provision refers to serious misconduct, not performance or attendance issues. The suspension must be imposed pursuant to a written policy applicable to all employees

http://www.dol.gov/elaws/esa/flsa/overtime/cr5.htm

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Horse Tense April 20, 2015 at 12:56 pm

Thank you for your response, and link. I definitely plan to look into this some more and will be sure to pass this information along.

My friend learned that he was suspended pending an “investigation”. The company still hasn’t notified him whether or not they think he was responsible for any misconduct, but have paid him for the time being. So we will see what happens. (Hopefully that will be the end of it.)

Anyway thanks again! Looking forward to reading more Evil HR wisdom soon!

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Evil HR Lady April 20, 2015 at 1:53 pm

Hopefully. Suspension is often necessary for an investigation, but it can be emotional terror.

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Alex April 20, 2015 at 11:12 pm

I think it’s safe to say that people who are on salary tend to work more hours than the regular 9-5 folks. I am surprised that those people who take advantage of the salary system think they can and will get away with working anything below 35 hours per week!

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Jeff A. April 29, 2015 at 4:31 pm

I agree with your suggestions for handling this problem in the legal sense, but I find it a little odd that employers and employees still get so hung up in the specific number of hours you work. The factory-line model of more hours labor directly translating to more production is just so….outdated.

You’re paying me for what I produce for your company, not my time. If I can do in 35 hours what takes my coworkers 40 or 45, you shouldn’t penalize me for it. If you want to increase my responsibilities or the standards of production you want me to meet so I have reason to put in the extra time, that’s fine.

Just a little odd that the same people who are always chirping about others not working a “full” 40 hour work week are usually the ones you notice posting on facebook, chatting every 30 minutes at the water cooler, surfing the web, etc. Guess you gotta fill those extra 5 hours…

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Harry December 19, 2017 at 10:11 pm

To my understanding, time posting on Facebook, chatting at the water cooler, etc. is not work time (and no one should be including that in their hours). Also, everyone in the office has different skill levels. You pay someone that can accomplish more a higher salary, but you expect both of them to be in the office and working for at least 40 hours a week. (We have no end to the job at hand, so no concept of “getting it done” in less than 40 hours.)

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