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

An Approach to Dealing With an Exempt Employee Who Doesn't Work 40 Hours

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In an office where company policies state that exempt employees must work a 40-hour work week, an exempt employee is not working 40 hours. The office manager understands that the company must pay an exempt employee a full salary even if they don't work a full day. How would you address this with the employee?

First of all, good job on not just cutting her paycheck. So many people don't understand that you can't cut an exempt employee's paycheck if they don't put in the full 40 hours.

But, it sounds like she's holding you hostage over this law.

If she is 10 hours short each pay period, that means that she's taken more than 80 hours off. That's two whole weeks of vacation in 4 months with no docking of her vacation or pay. She's got the deal of the century from your organization.

Your company is losing out. You hired her to do a job and she's not doing it. While it's absolutely true that you shouldn't nickel and dime your exempt employees on the number of hours they work, they also need to be working reasonable hours.

This generally means that you can expect that one week she works 40 hours, the next 45, the following 37. A schedule like this balances out in the end. What you have, instead, is someone who is consistently working 35 hours and that's not what you hired her to do. So, let's fix this. Here's how.

Employer Alternatives

You can dock her vacation time in whatever increments you want.

State law governs vacation and most states pretty much leave it up to the business. You are subject to follow your own employee handbook, so you may need to update your handbook to better reflect your practices.

However, it sends a bad message to employees when you dock vacation pay for exempt employees.

You want your exempt employees able to leave early once in a while to go to a doctor's appointment or attend a parent-teacher conference, without giving up their vacation.

Hold a Sit Down Discussion About the Fact That She's Not Working 40 Hours

A better solution is to have a sit-down discussion with her. The first question to ask is, why is she leaving early so often? She may think that she's entitled to the time because she's exempt and that she has no intention of changing.

If that's the case, you can inform her that that isn't going to fly anymore. Tell her that she needs to come to work for eight hours per day, five days a week, and for the next six months, the CEO will approve any variances. Harsh? You bet. A hard dose of reality? Absolutely.

You may find that she’s leaving early because she doesn't have any more work to do and so, why stick around? This is perfectly legitimate. If you're an exempt employee you are paid to do the job and if you're capable of doing 40 hours of work in 35 hours, why stick around staring at the ceiling?

If she isn't doing everything that is expected of her, however, the question becomes does she know that? You may find that it’s a problem with communicated expectations.

Her knowledge of her requirements fails to line up with your expectations.

Frequently, when an employee is new to the job, you don't tell them everything that they should do and you assume that they will figure it out. If this is the case, discuss her responsibilities with her and the problem should solve itself. When she clearly understands the goals and expectations for her job, the average employee will do them.

She may have a personal issue that needs a lot of time. Is there a medical problem? Therapy? A child who needs care? She may hope that no one notices and is completely stressed out over it.

If that's the case, you can discuss with her a more permanent flexible schedule so as the employer, you know what to expect from her. For instance, allow her to work 10 hours Mondays and Wednesdays, and a half day on Tuesday to take care of her situation and still work 40 hours.

With 15 employees, you're subject to the Americans with Disabilities Act (ADA) and a medical (mental or physical) situation may fall under ADA. This requires reasonable accommodations from the business.

Exempt Employee May Not Want to Work 40 Hours

She may really want to work only 35 hours a week. You can say no. Or, you can say, “That's fine, but we'll cut your salary to match.” This is perfectly legitimate—you calculated her salary based on a 40 hour work week. If she's only going to work 35, a pay cut is in order. She may decide she'd rather work 40 hours and keep the full salary.

A whole host of other issues may be going on, but the important issue is that you must make sure that your expectations match hers. Right now, she's worked this way for four months, so she has no reason to change. It's up to you to tell her that you need a change and then follow through to make sure it happens.

And keep in mind, while you can't dock an exempt employee's pay, you can fire an exempt employee for not working the required number of hours. It's the last resort, but sometimes you need to fire the employee. Someone who takes advantage of a kind boss isn't a good employee.