What are the most common violations found by DOLs Wage and Hour Division (WHD)? Time clocks, rounding, training time, and break time are among the top six.
By law, employees must be paid for all “hours worked.” In general, “hours worked” includes all time an employee must be on duty, on the employer premises, or at any other prescribed place of work. Also included is any additional time the employee is “suffered or permitted” to work.
Note: There is no requirement for payment of holidays, vacation, sick or personal time.
Common Violation #1—Time Clocks and Rounding
First of all time clocks are not required. Where time clocks are used, employees who voluntarily come in before their regular starting time or remain after their closing time, do not have to be paid for such periods provided, of course, that they do not engage in any work.
That is, their early or late clock punching may be disregarded. Minor differences between the clock records and actual hours worked cannot ordinarily be avoided, the regulations say, but major discrepancies should be discouraged since they raise a doubt as to the accuracy of the records of the hours actually worked.
Example: Rounding
Many companies, particularly where time clocks are used, follow the practice for of recording the employees starting time and stopping time to the nearest 5 minutes, or to the nearest one-tenth or quarter of an hour. Presumably, this arrangement averages out so that the employees are fully compensated for all the time they actually work.
For enforcement purposes, the wage/hour division accepts this practice, provided that it is used in such a manner that it will not result, over a period of time, in failure to compensate the employees properly for all the time they have actually worked.
An employer will likely violate the FLSA minimum wage and overtime pay requirements if the employer always rounds down. Employee time from 1 to 7 minutes may be rounded down, and thus not counted as hours worked, but employee time from 8 to 14 minutes must be rounded up and counted as a quarter hour of work time.
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Example: Standard Rounding
An employer docks Jacks pay by a full quarter hour (15 minutes) when he starts work more than seven minutes after the start of his scheduled shift. Does this practice comply with the FLSA requirements? Yes, as long as the Jacks time is rounded up a full quarter hour when he starts working from 8 to 14 minutes before his shift or if the employee works from 8 to 14 minutes beyond the scheduled end of his shift.
Example: Rounding to Overtime
Susans schedule is 7 a.m. to 3:30 p.m. with a thirty minute unpaid lunch break. She clocks in 10 minutes early every day and clocks out 7 minutes late each day. The employer follows the standard rounding rules. Is Susan entitled to overtime compensation? Yes. If the employer rounds back a quarter hour each morning to 6:45 a.m. and rounds back each evening to 3:30 p.m., Susan will show a total of 41.25 hours worked during that workweek. She will be entitled to overtime compensation for the 1.25 hours over 40.
Example: 15-Minute Increments Only
An employer only records and pays for time if employees work in full 15 minute increments. Robert is paid $10 per hour and is scheduled to work 8 hours a day Monday through Friday, for a total of 40 hours a week. Robert always clocks out 12 minutes after the end of his shift. Robert is paid $400 per week. Does this comply with the FLSA? No. Robert worked an hour each week (12 minutes times 5) that was not compensated. (And that hour would be at the overtime rate.)
Common Violation #2—Pay for Training and Seminars
Attendance at lectures, meetings, training programs and similar activities is viewed as working time unless all of the following criteria are met:
- Attendance is outside of the employees regular working hours
- Attendance is in fact voluntary
- The course, lecture, or meeting is not directly related to the employees job, and
- The employee does not perform any productive work during such attendance
Attendance is not voluntary, of course, if it is required by the employer, or if the employee is “given to understand” or “led to believe” that his or her present working conditions or the continuance of employment would be adversely affected by nonattendance.
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Example: “Voluntary” Training
The administrator of a nursing home says specialized patient care training is voluntary, but the nursing supervisors expect all employees on their units to attend and schedule times for each employee to go. Is the time considered hours worked? Yes. When supervisors expect all unit employees to attend and schedule their times, it is not truly voluntary.
Example: Four Criteria Met
The dishwasher decides to go to the Alzheimers training session after his shift. Must the administrator pay for the dishwashers time spent at the training session? No, because all four criteria above are met. It is not considered hours worked.
In tomorrows Advisor, more common wage/hour mistakes plus an introduction to a surprisingly easy-to-use FLSA audit guide.