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Wage Claims, Overtime & Other Employee Compensation

HAVE YOU BEEN PAID FOR ALL THE HOURS YOU WORKED?

A: Yes. You are entitled to wages not only at your regular rate but at the overtime rate of 1½ times your regular rate, for any hour or fraction of an hour in excess of 8 hours per day.

      When an employee’s time card entries reflect that an employee is on the job a few minutes more than the standard shift time, questions may arise as to how to compute the actual working time. As a general rule, 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 if they are not engaged in any work. Employees, however, should be paid if they are allowed or permitted to work during that extra time.

     Unless the employee is either performing work during the period or has been directed by the employer to be on the premises, the early or late clock punching may be disregarded. Minor differences between the clock records and actual hours worked cannot ordinarily be avoided, but major discrepancies should be investigated since they raise a doubt as to the accuracy of the records of the hours actually worked.

     The California Division of Labor Standards Enforcement (DLSE) has adopted the practice of the U.S. Department of Labor of “rounding” employee’s hours for purposes of calculating the number of hours worked. The federal regulations allow rounding of hours to five minute segments. It has been an accepted industry practice to record 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. This practice of computing working time is accepted by DLSE, provided 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.

     In recording working time, insubstantial or insignificant periods of time beyond the scheduled working hours, which cannot, as a practical administrative matter, be precisely recorded for payroll purposes, may be disregarded. However, this rule applies only where there are uncertain and indefinite periods of time involved of a few seconds’ or minutes’ duration, and where the failure to count such time is due to practical considerations of the work environment.

     An employer may not use this policy to justify the failure to count as hours worked any part, however small, of the employee’s fixed or regular working time or practically ascertainable period of time regularly required for assigned duties. A difference of $4 per day, spread across 4 years of work or approximately $4,000 is “not a trivial matter to a workingman.” If this affects 100 employees, then the employer’s violation is not insignificant.

     When the total number of hours do not exceed 8 hours per day, the time that exceed the regular scheduled working hours should be paid at the employee’s regular rate. However, if the extra minutes bring the total number of hours worked in a day to over 8 hours, the extra minutes should be paid at the overtime rate of 1½ times the regular rate.

     A few employers have learned the hard way of the need to accurately calculate and compensate employees for actual work hours. Employers’ failure to follow the rules has caused employment lawsuits resulting in substantial penalties and back wages in favor of employees. It is therefore critical that employers and employees alike be aware of the rules in this regard.

© Law Offices C. Joe Sayas, Jr.