Tardiness and Attendance Policies: Point Systems, Pay Deductions and Legal Limits

You can discipline employees for being late, and you can pay them only for the time they actually worked, but you cannot dock pay for time that was worked, and you cannot count protected absences against them. A point system is lawful when it is written, consistently applied and tied to accurate time records.

This article shows how to write a tardiness policy, how pay deductions work for nonexempt and exempt employees, which absences must be excluded, and how to keep the records that support your decisions.

What you can and cannot do with pay

For a nonexempt employee, pay follows time worked. If an employee clocks in 12 minutes late, you pay from the actual clock-in time. You may not deduct more than the time missed, and you may not keep an hour of pay as a penalty for a 5-minute delay.

Rounding rules apply to late punches as well. Rounding is only lawful if it is neutral over time, as in the quarter-hour method described in our article on the 7-minute rule. A policy that always rounds late arrivals up to the next quarter hour but never rounds early work in the employee's favor is a wage claim waiting to happen.

In practice, the first step is deciding what you want the policy to do. Most employers want predictable coverage, fair treatment and a clear path to correct a problem, and a policy built around those three goals tends to be shorter and easier to follow.

Example: paying for a late arrival

Take an employee paid $17.00 per hour scheduled to start at 8:00 a.m. who clocks in at 8:11 a.m. and leaves at 4:30 p.m. with a 30-minute unpaid lunch. Time worked is 8 hours 19 minutes minus 30 minutes, or 7 hours 49 minutes.

Pay is 7.82 hours x $17.00 = $132.94, using 49 / 60 = 0.82 hours. The employee lost the 11 minutes, which is lawful, and you can also apply a disciplinary step under the policy. You cannot also subtract an extra 49 minutes as a penalty.

Notice that the example works in minutes, not in quarter hours. If your system rounds, apply the same rounding to late arrivals, early departures and overtime. Neutral rounding is lawful, but a rule that only works against the employee is not.

Exempt employees and the salary basis

Exempt employees must be paid a predetermined salary that is not reduced because of the quality or quantity of work. In general, partial-day deductions for lateness can destroy the salary basis and put the exemption at risk. Full-day deductions are allowed in limited situations, such as an absence for personal reasons, but the rules are technical.

Handle lateness of exempt staff with discipline or performance reviews rather than pay deductions, and check with counsel before any deduction. See exempt vs. nonexempt employees for the salary threshold and duties test.

Designing a point system

A typical system assigns points for each occurrence: for example, 0.5 for a late arrival, 1 for an unexcused absence, 2 for a no-call no-show. Points expire after a rolling 90 days or 12 months, and thresholds trigger a verbal warning, a written warning and then termination.

Keep the thresholds clear, and define a grace period if you have one, such as 5 minutes. Define a late arrival by punch time, not by a manager's impression. Employees should be able to see their own count so there are no surprises.

Consider adding a way to earn points back, such as 30 days of perfect attendance. It improves morale, gives employees a path to recovery, and shows that the system is intended to correct behavior and not just to build a termination record.

Absences that must not count

Do not assign points for leave protected by law. That includes FMLA leave, paid sick leave under state or city laws, military leave, jury duty, workers' compensation leave and reasonable accommodations under the ADA. Counting any of these can create retaliation or interference claims.

If your system assigns points automatically, make sure the absence type is coded before the points are added. Our guides on FMLA leave tracking and paid sick leave laws cover the details of protected time.

Review any absence that follows a request for accommodation, a workers' compensation claim or a complaint about pay. Timing can suggest retaliation, even if the points were applied correctly, so a second manager should review the decision first.

Documentation and consistency

Disciplinary decisions are only as strong as the records. Keep the punch times, schedule, the policy version in effect, the written warning and the employee's acknowledgment. Apply the same standard to every employee in the same role, including high performers and managers' favorites.

An unwritten exception for one employee can undermine a termination for another. If a manager changes a punch to excuse a late arrival, the change should be recorded with a reason, not made silently.

Remote work, no-call no-shows and job abandonment

For remote workers, define lateness by the schedule and the login or clock-in time, not by when a manager noticed. Require the same clock-in process as for office staff, and make clear that a late start counts the same way in both settings.

A no-call no-show is usually treated as a more serious event than lateness. Many policies treat two or three consecutive no-call no-shows as job abandonment, but the policy must say so, and the employer should try to reach the employee before ending employment, since a hidden medical emergency could be protected leave.

Review the rules once a year. Check which events produce the most points, whether they cluster in one department, and whether the policy affects a protected group more than others. Patterns like these often point to a scheduling problem, and not a discipline problem.

How SimpleWorkshift Helps Manage Attendance

SimpleWorkshift records every clock-in and clock-out from the iOS or Android app or the web, with GPS location on each entry, and compares it to the work schedule per employee. Managers see late arrivals and other exceptions in real time instead of at the end of the pay period.

Absence and PTO tracking separate protected leave from unexcused absences, and custom reports show attendance patterns by person or team. Payroll closing then uses the real worked time. Try it free for 30 days, with no contracts and cancel anytime, at simpleworkshift.com.