Law Practice Today | September 2013 | The Staffing/HR Issue
September 2013 | The Staffing/HR Issue
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Managing Off the Clock

By Laura Sankovich

Some of our most frequent calls in the past year have come from employers wondering why the Department of Labor is inquiring about their employees working off the clock and why they have not been paid for their time. This happens inside companies large and small.  The goal is not to successfully defend these claims but avoid them altogether. 

The Basics

Make sure supervisors and managers are trained to understand that they cannot require or encourage nonexempt (hourly) employees to work off the clock. Nonexempt employees must be paid overtime for any hours worked in a given pay period. In organizations where training and communication may be lax, a manager may have said, “We do not have it in our budget to pay any overtime.”  Employees can interpret that as “We need you to put in extra time but cannot pay you for it.” 

If overtime in your organization is not permitted, your policy should be clear in stating that, “No one is permitted to work any overtime.” That policy should be written and clearly communicated both to management and staff, so the Department of Labor doesn’t knock on your door, wondering why employees have not been paid the overtime hours due.  (In some circumstances, wages may be due to the employee for time worked off the clock, even if it is not over time.) 

Claims for overtime pay can spread like wildfire through your organization once one employee takes issue.  Inquiries on pay are difficult enough when one employee comes forward; imagine the time and legwork involved when multiple employees begin asking the same questions regarding their potential overtime payments missed.  The burden of proof for hours worked falls upon the employer and lacking a systematic approach to tracking time worked makes the task daunting.  Not only does this problem of unpaid time sabotage morale and raise questions about your company’s integrity, it can impact your reputation in the community, making it more difficult to hire great talent in the future.

How to Enforce

Be clear to your management team that encouraging or suggesting that employees work off the clock is subject to disciplinary action, including possible termination. This may be a strong stance to take, but it is important to establish a culture of compliance with the Fair Labor Standards Act (FLSA), which mandates that nonexempt employees are paid for the time worked. Do not leave anything to chance and develop a system requiring hourly employees to record all time worked.

It’s the employer’s responsibility to communicate to employees what compensable work is, and that they are not being “bad employees” for reporting the time, no matter how short the interval.  Paying this time correctly is a lot less expensive than the time you will spend dealing with the Department of Labor, rebuilding the morale in your organization, and repairing your reputation in the community.  It can be difficult to monitor what employees are doing off the clock, but being clear with them about their responsibility to report their time and your willingness to pay for it is important for being compliant with the FLSA.

  

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About the Author

Laura Sankovich, PhD, is owner of The Human Resource, an HR consulting firm.  She can be reached at 208.661.2539 or thrinfo@the-human-resource.com.


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