Recently we reminded our readers here about the new regulations to the Illinois Wage Payment and Collection Act, which include, among other changes, the requirement that employers “[R]egardless of an employee’s status as either an exempt, administrative employee, executive or professional…” maintain accurate records of hours worked. Many employers continue to scratch their heads, wondering why this requirement exists and more importantly what to do in order to comply with it.
Let’s first address the question of why employers must now keep time records of exempt employees. Certainly, a truly exempt employee is not paid hourly nor eligible for overtime, so what is the necessity for time records? Moreover, there is no penalty to an employer for failure to keep accurate time records of hours worked of exempt employees for overtime purposes, because they are ineligible, as long as they are not misclassified as exempt. It is likely that the new requirement to maintain time records for exempt employees is to address the event of a misclassification, when an employer would be liable at that time to produce time and pay records to determine wages owed. Of course, this was true even before the regulation changes.
Additionally, record of vacation time earned and used, as well as other benefit time, the payment of which is also governed by this same Act, is important for all employees, regardless of classification. These records would be necessary in the event of a dispute of final pay upon separation of an exempt employee.
It’s an onerous task to accurately capture the time of exempt employees. First of all, many exempt employees philosophically resent reporting their time. They often feel insulted (“I work over and above what is expected of me and now I have to clock in and out every day?”) and mistrusted because their pay is not based on their hours worked. It is equally difficult for another to accurately capture the hours worked of an exempt employee because an exempt employee’s hours and where they perform their work often vary by the day, week or month. They may start or end their day at a meeting outside of their work location, or even out of town. Additionally, in a workplace culture where exempt employees have never had to clock in and out, it is difficult to change their habit and ensure that their time is accurately kept. It is equally difficult to capture time worked at home or outside of an exempt employee’s normal workday.
The expected changes to the FLSA regulations may encourage employers to institute timekeeping requirements for exempt employees. The anticipated changes in requirements for the most common exemptions, administrative, executive and professional, will likely result in reclassification of a number of middle management positions. An accurate record of when these employees work and what work they do will be invaluable in determining their future FLSA classification under regulations that expand non-exempt definitions.
Web based time keeping programs may be helpful for employees to record their time worked as they can sign in and out from any location. The larger solution though is to change the workplace culture to be more accountable for all of their time and more comfortable recording it.
