OT, or not OT? That is the question.
As workplaces become more flexible and standard business hours change, employers need clear policies to track employees doing off-the-clock work.
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From the pages of In Business magazine.
Whether or not someone enjoys being accessible 24/7 for phone calls and work emails, that’s where technology has taken modern-day society. Certainly, people don’t need to jump at every beep and bell from their smartphones, but in today’s instantaneous world, they probably will.
As the workforce becomes more flexible in terms of hours or place, how does a business manage off-the-clock work? Could a dedicated employee who believes they’re helping their daily workload by checking work emails on a bus ride home or at night actually cost a company?
The short answers are not so short.
Off-the-clock work is considered uncompensated work conducted outside of an employee’s normal working hours. It does not count toward an employee’s weekly hours.
However, if an employee or manager knowingly allows a nonexempt (i.e., hourly) employee to perform off-the-clock work without accounting for that time, they could face legal challenges including claims for back pay.
The article, “Is it illegal to work ‘off the clock?’” at FindLaw.com explains the dangers. “While some managers may think that as long as they aren’t requiring employees to work off the clock, then extra work is fine, that isn’t the case. Even the eager employee who wishes to ‘go the extra mile’ by working unpaid can later change his or her mind and request back pay, including liquidated damages, for off-the-clock work. A cautious employer should exercise control over employees’ work and prevent unpaid work from being requested or allowed.”
The U.S. Department of Labor’s Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.
It also categorizes private sector jobs as either exempt or nonexempt to ensure that most employees in the U.S. are paid at least the federal minimum wage for all hours worked, and paid overtime (one-and-a-half times the hourly rate) for time exceeding 40 hours in a given workweek.
These designations depend largely on meeting FLSA “duties test” criteria relating to how an employee is paid (hourly or salaried), how much an employee is paid, and what the job duties entail.
Nonexempt workers must be compensated for any off-the-clock work they perform on behalf of an employer. That might include checking or answering emails on a bus ride home at night, or checking in from home later in the evening. And if that work puts them over 40 hours in a given week, they are eligible for overtime pay.
The distinction between regular and off-the-clock business hours may not be as well defined as it once was, as laptops and smartphones make us more accessible and flexible work schedules allow employees to work from anywhere or at any time.
Employers need to recognize this, set policies in writing, and understand that for nonexempt employees, tracking hours is more important than ever before.
Two local attorneys, IB blogger Jessica Kramer, a partner with Kramer, Elkins & Watt LLC, and Jennifer Mirus, an attorney with Boardman & Clark, offer their insight.
“Honestly, the smartphone is probably the biggest culprit in bringing this issue to the forefront and making it more difficult for employers to manage if they don’t know what they need to be doing,” notes Kramer.
Employers are required to keep records on all employees, but for nonexempt employees in particular, technology is actually helping, Kramer explains, because most electronic communications are time and date stamped. In terms of recordkeeping, virtual time clock apps make punching in easier than ever, though spreadsheets and paper timesheets work just as well. The point is, all companies need some sort of tracking mechanism for hours worked.
In regard to a nonexempt employee, Wisconsin law requires employers to track the time they begin and finish working each day, as well as the total number of hours worked each day. “As an employer, if I were to get audited by the Department of Workforce Development I’d have to produce those records,” Kramer notes.
That said, if an nonexempt employee starts work at 8 a.m. and leaves at 4 p.m. and then feels compelled to login remotely from home at 10 p.m. for 15 minutes, that employee record needs to show two start and two end times, Kramer explains, not just one that starts at 8 a.m. and ends at 10:15 at night.
In terms of overtime pay, some companies schedule nonexempt employees for fewer than 40 hours a week to allow a small cushion of time before overtime kicks in. Others might decide when a certain amount of overtime needs to be preapproved.
“There are different ways to coordinate overtime so you’re not incentivizing employees to suddenly drop what they’re doing and leave when the whistle blows,” Kramer says, but she also urges businesses not to shy away from paying overtime. “In the grand scheme of things, it probably won’t cost employers a lot of money, while not following the rules could.”