There are many reasons you might want or need to track exempt employee time. For example, you may opt to track an exempt employee’s hours for purposes of client billing, grant tracking, Family and Medical Leave Act (FMLA), retirement or pension plans, or hours-based benefits calculations such as vacation accrual.
However, as a general rule, we recommend focusing on whether the job is getting done instead of worrying about the exact amount of time spent in the office. Tracking exempt employee hours adds likely unnecessary work to their plate and to yours.
While you may choose to track the hours of exempt employees, ensure the information is not used to take deductions from an employee’s regular salary, unless such deductions are allowable under both state and federal law. An exempt employee’s salary should not fluctuate based on the number of hours worked within the workweek. Prorating an exempt employee’s salary based on hours worked may result in the loss of the exemption.