Understanding time worked
LaTisha O’Neal CPP, payroll supervisor at Bama Companies Inc, outlines the rules in the USA
F or what are we required to pay our USA employees? We understand that we have to pay our employees for the time they provide services to the company, but there are other instances in which employers are required to compensate employees. Understanding what is considered ‘time worked’ is a key to ensuring compliance with federal regulations. There are multiple types of compensable time. All time during which an employee is required to be on duty either on premises or at a prescribed workplace is considered worked time. The Fair Labor Standards Act 1938 (FLSA), governs minimum wage, overtime, equal pay for equal work, and child labor. Within the FLSA, the definition of hours worked is given as suffered, or permitted, to work. What does that mean? Which activities are covered and which are not? Additional legislation enacted to clarify the FLSA, such as the Portal-to-Portal Act 1947, provides some help. It clarifies the beginning and end of a workday, length of workday, and activities outside the workday. The principle activities an employee performs are considered an integral part of the job and indispensable to the performance of that job. Examples of duties that would be considered integral are maintaining work equipment, reporting to work early to distribute materials, or doffing and donning (or changing clothes) as required. In this instance, an employee is required to change into or wear certain items that are a requirement for the position, such as protective gear, and is required to do so on the employer’s premises.
Examples of actions that would not be considered integral would be changing for personal convenience, waiting in line to punch out, passing through a security device, or traveling to the job site. Employees may be required to wear uniforms at work, but if they have the choice to change at home or at the workplace, the time spent changing would not be considered compensable time. When deciding whether an employee should be compensated for time spent performing an action – a good rule of thumb to ask – is the action benefiting the employer or the employee? An example is waiting to be engaged and engaged to be waiting. The key word in both is the first word. When an employee is waiting to be engaged and the employee can conduct personal business, it is not considered worked time. When an employee is engaged to be waiting, the employer is restricting the behavior of the employee. The time is considered worked time and includable in the overtime premium calculation. Meal and break times also need to be monitored. During these times, the employee should be relieved of all duties and responsibilities. Short rest breaks are generally seen to be for the employer’s benefit, so they are compensable worked time. A break of thirty minutes or more while relieved of all duties would be a significant break and not compensable. The FLSA does not mandate the giving of a break, but you should check state laws. One important thing to remember is that compensable time does not relate to approved time. For example: a company has a policy that all overtime must be
approved before the time is worked. An employee is working on a project and decides to work late to finish the project by the deadline given without approval. At the end of the week, the employee has worked hours that exceed forty. Even though the employee did not get the additional hours approved, it is still considered compensable time. ❑ This article was published in the April 2016 issue of the American Payroll Association’s PayTech magazine. The American Payroll Association (APA), www.americanpayroll.org, is the USA’s leader in payroll education, publications, and training. This nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Representing more than 21,000 members, APA is the industry’s highly respected and collective voice in Washington, D.C. The Global Payroll Management Institute (GPMI), www.GPMInstitute.com, spearheads the APA’s global initiatives to provide the world with a leading community of payroll leaders, managers, practitioners, researchers, and technology experts. Subscribers connect with each other through networking discussions, collaborative opportunities, and access to education and publications dedicated to global payroll strategies, knowledge, research, employment, and training. GPMI also publishes several global payroll texts and white papers as a benefit to subscribers.
| Professional in Payroll, Pensions and Reward | March 2017 | Issue 28 46
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