As employers are scrambling to reclassify employees from salaried to hourly (I’ll use these terms, though I know you all know that really means exempt and non-exempt from the FLSA’s overtime and minimum wage requirements), many are going to be dealing with the aftermath of angry employees. Why? For the most part, tracking time and the perception they are no longer professional and trusted to just get the job done and because now they have another burden. As one who has to track every minute of billable work, I can certainly appreciate that feeling of dread in recording time worked! In fact, many attorneys leave private practice to go in-house, with not having to record time as a main decision factor. I get it! So, what’s an employer to do? Well…the Department of Labor has clarified with its new overtime rules that there are many ways to meet the employers’ record keeping burden with respect to an hourly employee’s time worked. Fun fact: employees don’t actually have to punch a clock or record every coming and going (though I still think it’s a better practice). Second fun fact: I took the picture of the DOL yesterday as I was visiting our Nation’s Capitol! Talk about wage and hour geeking it out right? Anyway, I digress. How can employer’s track hourly employee’s time?
Punch a Clock.
First, certainly, an employee may be instruced to punch a clock. Back when I was working at my first job in the 1990’s at Iowa Book, a student bookstore at the University of Iowa, we literally punched a clock with a time card, similar to this one in the picture. However, now with the Internet and electronic devices, there are many fingerprint scanners, key cards, and mobile device apps or telephone call-in systems for employers to utilize. Even the DOL provides an app for tracking employees” time! Still, each of these actions burden the employee, and so yes, there is going to be some unhappiness no matter the method. Don’t fall prey to this unhappiness – it is the law, and something employers and employees can’t agree on (or contract out of). Let me be clear – and employee cannot “agree” out of any rights (or employer responsibilities) under the FLSA.
Agree on a Default Schedule & Deviations Therefrom.
Second, for employees who work a normal, say 8 – 5 schedule, the employer and employee can agree to a “default schedule” that reflects the employee’s daily and weekly hours; in this instance, the employee needs to only indicate when he or she deiated from that set schedule. In that case, the employer must record the changes to the hours worked. A word of caution, however, this method requires great trust in the employee, that he or she will actually notify the employer when hours are worked – or not worked – outside of of the set schedule. If, for example, the employee does not notify the employer of the changed hours, the employer is still on the hook to pay for those hours. So, if the employee gets terminated, for example a year later, it would not be unheard of for that employee to then argue she or he had to work those hours “off the clock” or was “not allowed” to deviate, or was “forced to”. See where I’m going with this? Simply, this great idea of the DOL does have some exposure if not very well watched over. Don’t forget, at the end of the day, the EMPLOYER is always responsible for recording the employee’s accurate hours worked. This is why you’ll get a record keeping claim with any claim for lost wages.
Employee Self-Reports Daily Time By End of Pay Period.
A third way to record hours is related to employees who work a flexible schedule. In this case, the DOL notes in its guidance that the employer must keep an “accurate record” of the daily hours worked. Thus, The DOL states:
an employer could allow an employee to just provide the total number of hours she worked each day, including the number of overtime hours, by the end of each pay period.”
Again, while this is an acceptable method, see Fact Sheet 21: Recordkeeping Requirements under the FLSA, the same caution as in the second example above. Any time the employee does not have to punch a clock of some sort (electronic or otherwise), the employer has some level of additional exposure.
For all of these options, employers should keep in mind that these newly reclassified employees (hourly from salaried) will also experience issues with breaks, lunchtime, travel time and the like. Simply they may be used to longer lunches, walks during the day and other daily flexibility, while perhaps starting the day sooner or staying later. Certainly, employers will want to have conversations and training with these newly reclassified employees, so they clearly understand the expectations and how to record the hours worked. Further, be sure they are familiar with your hourly timekeeping policy in your employee handbook – and treat all employees the same who are in the same classification. In other words, no special treatment; an hourly employee is an hourly employee. Thankfully, this year, you can certainly pass the blame onto the DOL!