Special Report — Complying with Wage and Hour Regulations (Part 3 of 3)
The SESCO Report July/August, 2022 (Part 3 of 3)
Common Misconceptions and Compliance Issues
SESCO is available through a Professional Service Agreement or through a per diem fee to conduct a thorough Wage and Hour as well as HR and employment law audit. Contact SESCO to learn more about our Professional Service Agreement and services provided to clients in all industries across the country — [email protected] or 423-764-4127.
Calculating Overtime
Misconception 8: We have multiple locations and at times require our employees to travel to other sites during their work day. We require them to clock out when they leave and clock back in when they arrive at the new location. As such, we do not have to pay for this drive/non-working time. Travel to and from work or travel outside the normal work day is generally not considered compensable time. However, travel time must be counted as hours worked to include:
- It is time spent traveling from one work site to another
- It is driving even after hours to fulfill an employer's requirements or requests such as going by the bank on the way home
- If the employee has gone home from work for the day but is called out again to travel, this would be compensatory.
Misconception 9: Sometimes we offer training to our employees. Since we are paying for the training and they are not doing any work, we do not have to pay our employees. Anytime an employer requires an employee to attend training during working hours, that time will be considered working time. Training is not considered hours worked if all of the following conditions are satisfied:
- Meetings are held outside of hours worked
- Employee attendance is completely voluntary
- If an employee does not show they are not disciplined in any way
- The training is not directly related to the employee's job
- The employee does no work during the training time
- The course or training is held after work hours and is not a requirement of the job even if the subject matter pertains to the job.
Misconception 10: We have to use a time clock or electronic timekeeping system to keep track of the hours of our nonexempt employees.
The DOL states that employers may use any timekeeping method that they choose. This would include allowing employees to record their hours of work by hand. Regardless of the method, SESCO always recommends that the employee and manager/HR Director sign off agreeing that true and accurate hours of work have been recorded.
Misconception 11: Our company supports our community in a number of different ways to include supporting charities. We recommend to our employees that they should volunteer. As it is not working time, we do not have to pay them.
Charitable work performed at the employer's request as part of the job or during working hours is considered work time. Charitable work/volunteering will not be considered hours worked if:
- It is completely voluntary (even if the program is sponsored by the employer)
- It is performed outside of scheduled working hours
If employees get the impression that their jobs would be in jeopardy in any way or that they would receive fewer perks for failing to contribute to charity work, a court could say that the hours were not voluntary but were coerced. In addition, employees cannot perform volunteer work for an organization that employs them if the work is similar to that for which they are paid.
Misconception 12: We pay our employees bonuses and incentives for things such as meeting production goals, good attendance, good safety goals, etc. We are not required to pay overtime on these additional earnings.
There are technically two (2) different types of bonuses which include discretionary and non-discretionary. Discretionary bonus payments are completely that, discretionary. These bonuses are not communicated to employees, employees are not working towards accomplishing goals to receive the bonus and these bonuses are not regular and recurring. Typically defined discretionary bonuses which would not be required in overtime calculations are such as Christmas bonuses. Non-discretionary bonuses are required to be included in overtime payments. Non-discretionary bonuses are bonuses that incentivize an employee's behavior or production. These monies must be included in the regular rate for the purposes of overtime. Even if these non-discretionary bonuses are paid on a monthly, quarterly or even an annual basis. An employer is required to go back and roll these non-discretionary bonuses into each workweek and calculate overtime on these bonuses. If your organization pays these non-discretionary bonuses to employees, you should contact SESCO to learn more about the calculation of overtime as well as request SESCO's staff recommendation which will provide an "easy" method to calculate the overtime due. |
