A perennial challenge
for companies with nonexempt employees working shifts during “fall
back” time
Converge Thoughts
The key takeaway from this article is to be aware of changes like this one because pay is affected. Twice a year pay and overtime need to be monitored to be sure no mistakes are made when we “fall back” or “spring forward”. Within the article there are specific instances and instructions that need to be followed to avoid breaking the overtime rules and having to face the consequences.
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On Sunday, Nov. 6 at 2:00 a.m., daylight
saving time will end and in most states clocks will be set back one hour. As it
does every year, this change presents a challenge for employers whose nonexempt
employees are working during that time.
This wage and hour
issue will affect all employers that employ nonexempt employees with the
exception of those working in Arizona and Hawaii, both of which do not observe
daylight savings time.
Below are some of the
wage and hour implications stemming from the end of daylight savings time:
- Employers are required to pay
employees for all hours worked. However, employers whose nonexempt
employees are working at 2:00 a.m. on Sunday, November 6 must pay them one
additional hour of pay unless the start/end times of their shifts are
adjusted in anticipation of the time change. In essence, such an employee
will have worked the hour from 1:00 a.m. to 2:00 a.m. twice. - Employers whose nonexempt
employees are working at that time might owe those employees overtime
compensation as a result of the time change. That is, employers must
include the additional hour of work in determining the employee’s overtime
compensation for the week. - In addition, employers must
take this additional hour of work into account when computing the
employee’s regular rate of pay for purposes of calculating the employee’s
overtime rate.
Preparing to ‘Spring Forward’
Employers also should be aware of their pay
obligations at the beginning of daylight savings time in the spring. Nonexempt
employees who are working on Sunday, March 12, 2017 at 2:00 a.m.—when clocks
will spring forward to 3:00 a.m.—are entitled to one less hour of pay than they
otherwise would have been. So, an employee scheduled to work an eight-hour
shift from 11:00 p.m. to 7:00 a.m. will only have worked seven hours because
essentially the employee did not work from 2:00 a.m. to 3:00 a.m.
Employers that decide to pay such workers for
a full eight-hour shift are not required under the Fair Labor Standards Act
(FLSA) to include that extra hour of pay in calculating employees’ regular rate
of pay for overtime purposes. In addition, the FLSA prohibits employers from
crediting that extra hour of pay towards any overtime compensation due to the
employee.
Employers, however, should ensure that they do
not have any additional obligations under a collective bargaining agreement or
state law.
For advice or inquires on the overtime rule or any compliance related question please contact Converge HR Solutions at 610-296-8550 or info@convergehrsolutions.com
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