Docking exempt employees for part-day absences. (Fair Labor Standards Act)

Exercise extreme caution in this area, or your association could wind up with big overtime pay problems.

Under the Fair Labor Standards Act (FLSA), executive, administrative, and professional employees are exempt from overtime. In other words, no matter how many hours they work, they get the same amount of money; you don't have to pay them time and a half when they work more than 40 hours in a week.

Half a dozen or so criteria have to be met to qualify as an "exempt" employee under the FLSA, and one of the most important is that the employee be paid on a salary basis. The regulations interpreting the term salary basis say that if an otherwise exempt employee is subject to deductions from his or her pay for absences from work of less than a whole day, then the employee is not paid on a salary basis and therefore does not qualify as an exempt employee.

If the employee is not classified as exempt, he or she must be paid overtime. This situation can result in the employer being liable for tens of thousands of dollars in overtime pay, because the statute of limitations is two years or three, if the violation is willful.

A number of courts, including some of the U.S. courts of appeals, …