Overtime not being paid.

eliseb

We recently changed our policy for hourly employees regarding overtime, which I am now questioning. Can anyone help? We posted a rule that employees will not be paid overtime before or after their scheduled shift time. Unless it is approved, they must actually be working. We had employees clocking in and then hanging out in the breakroom or milking the clock after work. Our time clock now rounds the times. I am now wondering if this is against FLSA. Any feedback?

LindaS

There have been previous discussions regarding the "rounding" of timeclocks so you may want to do a search for "time clocks" and see what you come up with. As far as the legality of the policy, non-exempt employees must be paid for all hours worked so if you are utilizing a time clock system and the time shown would result in OT being paid, you must pay the employee that time and if they are not working or just "milking" the clock you can discipline them in accordance with your discipline policy but if the DOL ever came in to do an audit and questioned the time cards, you may be hard pressed to answer why an employee was not paid in accordance with their recorded time.

Hunter1

Under the FLSA, you are allowed to have a practice of rounding to the nearest 5 minutes, one-tenth of an hour, or even quarter hours, providing that the practice results in employees averaging out so that they get paid for time worked. We round to the quarter hour, so if the employee works until 7 minutes after the shift, he/she doesn't get paid, on the other hand, it they work 8 minutes, they get paid for a quarter hour. You can also disregard early and late punches as long as the employees actually aren't working; however, you should discourage the practice because it's hard to prove that the employees aren't working during this time on the clock, and your time records will become suspect. Do they really reflect the time spent working?

E Wart

Rounding is permissable by FLSA as Hunter 1 said. The main thing is if you round, you have to round up as well as down. (Can pay to the exact minute, round by the fives, 10's or 15's.) You must also be consistent. (Don't do it one week and not the next. Set up a policy and sick with it.) However, you should call your state Dept of Labor. Some states have stricter laws. (Such as in CT you have to round each block of pay (such as morning and afternoon and then then add together. However, federal you can round by the day.))
As far as employees not working, but not clocking out. I would advise paying them for what they work (unless they are willing without retalliation to make a note on their time card that they failed to clock out on time and didn't work this time.) Then I would address it as a performance issue that should be addressed by their supervisor, not FLSA. Have the general manager stand by the time clock for a few days when employees should be clocking out and see what happens.
E Wart

pmrPA

I agree with all of the above. We had a problem with employees coming to work 1/2 hour early, punching in and then sitting around drinking coffee and reading the paper. Also, an office employee would continually punch out 15 to 20 minutes after 5:00 pm because she would doddle at the end of the day. I pointed out to senior management that we could face a problem if we were audited or if the time came where one of these individuals needed to be disciplined for cause and retaliated by filing with Wage and Hour for back overtime. We instituted a policy wherein employees could not punch in earlier than 7 minutes prior to start time and no later than 3 minutes after finish time (applied to punched out lunch hours, also). There was a lot of grumbling at the beginning and some employees continued to ignore the rule (change is SO hard for some individuals). After being verbally warned, and after one individual was officially disciplined, everyone got the message and the policy is working. (I did make a very comical sign using a clip art object of a man checking his watch with the text balloon "Don't forget the 7 minute rule!" and placed it directly beside the timeclock as a visual reminder!!) Make the policy and be prepared to follow through on the discipline end or it will never work.

moneyman

If paying out OT is an issue, another thing to watch for actually the opposite of the problem that you reported, it is the people who are arriving early and working whether clocking in or not.

We had the problem of employees coming in early, not clocking in until their start time, however actually at their stations and working "off the clock". Employees thought that they were being "responsible" for putting in that extra 15-20 minutes without asking to get paid for it. We had a hard time making them understand that it was not their option of whether or not to get paid, if they were working, they had to get paid, approved or not, and if it made more than 40 hours a week, then it was OT. If we allowed them to be on the premises early and they began work, then we must pay them. One said that she just came early because of her ride and only read the newspaper at her desk and found it ridiculas that we asked her to do that in the break room and not in her office. We actually had to discipline one employee for being a "good" employee in wanting to put out that extra effort. They all say that they would never cause problems or report it, however, I am sure that if we ever got audited and employees were polled, it would come out.