DEAR CARRIE: I am an exempt employee. We have an electronic payroll system that I am required to log into each day.
Recently, we were told that if we didn’t log in, we wouldn’t get paid, even though other electronic proof exists that we have been working, such as our desktop login, emails and work time stamped in a specific platform. Because of a system error, I wasn't credited for a vacation day and my pay was docked. I was also docked for a full day because I forgot to log in. I logged in the other nine days of our 10-day pay period, however. Can my employer legally dock my pay because of a machine error? Does failure to log in meet the criteria for docking exempt employees? Is my employer required to do due diligence to determine if an exempt employee did not show up for work? And, finally, is my employer required to notify me before my pay is docked? — Docking Ire
DEAR DOCKING: If you are truly an exempt employee, your employer is treading on thin ice, and maybe has fallen through. Exempt employees largely fall into executive, administrative, professional or outside-sales categories under federal labor law. Someone in the executive category, for example, performs work that mostly consists of managing.
In exchange for not having to pay exempt employees overtime or even minimum wage, employers have to guarantee them a fixed salary, with limited exceptions.
"One of the criteria for an employer asserting exempt status for an employee is the employee being paid on a salary basis without reduction or docking . . . regardless of the quantity or quality of the work performed, with few exceptions, including the employee taking a full day off for personal purposes," said Irv Miljoner, who last month retired as the head of the Long Island office of the U.S. Department of Labor.
Even though you are exempt, your employer can require you to log in or even log out, Miljoner said.
"Though a daily record of hours worked and wages paid is required only for nonexempt workers, an employer does have the right for operational purposes to require any or all of its employees to log in, " he said.
But refusing to pay you because you neglected to log in isn't a legitimate reason. "The employer failing to pay the employee, whether as punishment for not logging in or otherwise, would invalidate that employee’s exempt status, and subject the employer to possible overtime or even minimum wage liabilities, as all [nonexempt] employees must be paid for all hours worked," Miljoner said.
In docking you because of a system error that shortchanged you on days, your employer would be in violation there, too.
"With regard to being docked a day’s pay for that vacation day, that is another breach of the salary basis criteria," Miljoner said.
The bottom line is that docking your pay could have unpleasant consequences for your employer, particularly if you work a lot of overtime, time the company doesn't have to pay employees who are truly exempt.
"The employer can dock pay for time not worked, but risks losing the benefits of their employees’ exempt status if they do so," Miljoner said.
As for your employer being required to do its due diligence before docking your pay, it should make sure it has a legal basis to so. Otherwise, it risks running afoul of labor laws, something that could result in a painful audit and violations.
For more information, call the U.S. Labor Department at 516-338-1890 or 212-264-8185.
Go to bit.ly/LIsalary for more on federal labor law salary requirements for exempt employees.