Employees can be categorized into two groups: exempt and non-exempt. Non-exempt employees are paid on an hourly basis and their hours are kept track of so they can be paid accordingly. Exempt employees, on the other hand, are paid a set amount per year regardless of how many hours they work. Most exempt employees are salaried employees and are expected to work an average of 40 hours per week.
Business owners know they need to provide timekeeping systems for their non-exempt employees, but they may be confused about doing the same for their exempt employees. Though how many hours they work should not affect their pay unless they work overtime, non-exempt employees can still benefit from keeping track of their hours.
Are You Required to Keep Timesheets for Salaried Employees?
The simple answer is no. Federal law does not require you to track the hours of those employees you pay on a salary basis. However, this does not mean that you cannot require your employees to do so.
What Are Some Situations Where Keeping Timesheets for Salaried Employees is Beneficial?
Under federal law, an exempt employee’s hours cannot be tracked if the purpose for doing so is related to his or her pay. However, you can require they track their hours if the reason behind it is related to one of the following:
When Their Salary Comes from More Than One Department
If you have an employee who is cross-trained and their salary comes from the budgets of two or more different departments, it’s necessary to track their hours. This helps you determine how much of their pay to deduct from each department, and can also help you identify if they are spending too much time on one of the department’s duties.
When You Need to Track Their Paid Time Off
Many exempt employees have paid time off built into their salaries. If you aren’t tracking how many hours they work, you may not know when they have earned these privileges or how much they’ve already taken.
When You Need to Track Project Hours
Do you bill clients by the hour or perform numerous client projects that involve specific team members? If so, tracking hours could be an essential part of your business practices. Knowing which employees are working on what project is valuable information that you can use to bill clients or determine the profitability of a project.
To Be Used in Employee Evaluations
Under federal law, you cannot alter a salaried employee’s pay depending on the number of hours they work. However, you can use this information in employee evaluations and when you’re determining raises and promotions. Knowing if an employee routinely puts in extra hours or tends to take two-hour lunches is useful information when making decisions about their future.
Making Timesheets for Salaried Employees Easy
the last thing you want to do is make keeping track of their time a huge hassle for salaried employees. Here are some tips on making it an easy and efficient task.
Consider Using a biometric time keeping System
Filling out spreadsheets or coming into a home office to punch in and out are tedious tasks that your salaried employees won’t want to do. Make the job of timekeeping easy for them by providing a biometric solution. These methods allow your employees to track time with their personal smart devices from any location. They also provide additional features such as remote schedule management and streamlined communication.
Make it Consistent
When you make some members of your team track their hours and not others, it’s easy for resentment to grow. You can gain valuable information from tracking everyone’s hours worked, so make sure you require it for everyone in your office.
Tell Them Why It’s Important
Your salaried employees may wonder why they have to keep track of their hours when it doesn’t affect their pay. It’s important to share with them why it’s important. If you don’t communicate with them about it, they’ll either resent having to keep track of their hours or neglect to do it all.
It’s best to reward employees for accurately keeping track of their hours as opposed to punishing those who don’t. Offer incentives for employees who consistently track their hours over a certain period of time. You could give them a Friday afternoon off, or give them a gift certificate for a free meal or massage. Any incentive is likely to be effective and will encourage your team members to be diligent about their tracking efforts.
Though it’s not a legal requirement to make your salaried employees keep track of their time, it’s a good idea for any business owner. Make sure you offer them an efficient and easy way to track their hours, incentivize them to do so, and make sure to consistently enforce it with all of your team members.