Working off the clock happens every day. Checking the next day’s calendar or shooting off a quick email before bed is common, especially since many employees are still working from home and can never really leave the “office.” But if employees are non-exempt under the Fair Labor Standards Act (FLSA), working off the clock can cost you big time, especially if you overlook or encourage it.

Examples of Off-the-Clock Work

Off-the-clock work can include seemingly innocent or quick tasks that employers could easily disregard as work that needs to be paid. For industries such as construction or manufacturing, off the clock work can include pre- or post-work time like warming up the truck, transferring equipment to the worksite, or putting away tools once the day is over. It can also include taking work home to complete after hours or answering work-related phone calls after the shift ends. No matter how if an employee chooses to work off the clock or is encouraged to by their employer, that employee must be paid for their work if they are non-exempt under the FLSA.

According to the FLSA, all non-exempt workers must be paid for all hours worked, including overtime. If the employee comes to work early to check assignments or work emails, he or she must be paid. If they stay to help a customer after they’ve already clocked out, they must be paid. If not, the employer could be responsible for back wages.

Back Wages for Off-the-Clock Work

In general, according to the Department of Labor (DOL), “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work. That means if your employees work off-the-clock, it is still hours worked. It even includes downtime, i.e., when work must wait on subcontractors, permits or equipment to arrive. If you’re not paying employees for this time, you could be responsible for back wages.

According to UpCounsel, if an employee believes he or she is owed back wages, complaints can be filed with the DOL for any unpaid overtime for up to the last three years of employment. This also includes liquidated damages equal to what a former employee is owned. UpCounsel does note that employers can supersede such a claim if they acted in good faith and have evidence of due diligence in adhering to the FLSA.

How to Prevent Off-the-Clock Work

Is it legal to work off the clock? Not for nonexempt employees. There are time clock rules for hourly employees. Employees covered by the FLSA must be compensated for all hours worked or employers could face liabilities. Taking steps to prevent off-the-clock work is essential to complying with FLSA rules and regulations.

The best way to prevent off-the-clock work is to create a policy that detours employees from working before or after their shift. Employers should not overlook or encourage off-the-clock work and guidelines provide transparency about the company’s position. When crafting a policy about off-the-clock work, make sure the guidelines are clear and provide examples, like the ones listed above, of off-the-clock work.

Put the policy in your employee handbook and add it to onboarding and ongoing training materials. Educate your managers about what is off-the-clock work and how they can monitor it. A time clock app, like ExakTime’s, can help supervisors manage when and where their employees are working.

Compliance and Lawsuits for Off Clock Work

The FLSA requires employees be paid for every hour worked, including overtime. If an employee feels they are due back wages from working off-the-clock, they can hire an attorney to receive wages going back three years. According to UpCounsel, the number of wage and hour lawsuits for back pay is increasing, specifically the failure to pay employees for overtime. Employers need to track and record every hour that nonexempt hours worked.

Possible Penalties

Intentionally violating wage and hour laws under the FLSA not only requires that the employer pay back wages, but also liquidated damages. Liquidated damages are awarded when a contract is breached, and the court decides the injured party deserves compensation. Liquidated damages can be the amount owed in unpaid earnings, so employers who neglect to pay back wages could be forced to pay double if the employee files a lawsuit. The court may also require the employer to pay civil penalties as well.

What About “De Minimis” Time?

The FLSA does allow employers to disregard insignificant or de minimis time. These are periods of time beyond scheduled working hours that are infrequent and cannot be precisely recorded for payroll purposes. According to the FLSA, this rule applies only where there are uncertain and indefinite periods of time involved, a few seconds or minutes in duration, and where the failure to count such time is justified by industrial realities. An example of de minimis time would be if an employee clocks in for a new job, transports the tools needed to new job area then informs the foreman he or she is ill and goes home without doing any additional work. The time spent moving the tools to a new job would be considered de minimis or insignificant because it was limited to the one time.

The FLSA notes a de minimis policy should be applied with common sense that recognized the practical realities of recording identifiable work time. The employer must consider how frequently the activity is performed and whether the activity is part of the work the employee was hired to do.

Overtime Exemption Requirements

There are employees who are exempt from being paid overtime and thus off-the-clock work and those often are your salaried employees. An exempt employee does not fall under the overtime pay protections of the rules set out in FLSA section 13(a)(1). The FLSA defines “exempt employees” as those workers “employed as bona fide executive, administrative, professional and outside sales employees”. There are also “certain computer employees” who are exempted from overtime and minimum wage coverage in FLSA. These employees must meet certain criteria concerning their job duties, along with passing what’s known as a salary basis test. For example, executive employees must be paid on a salary basis of no less than $684 per week, according to 2020 FLSA overtime rules.

There are other exceptions to the overtime rules. FLSA lists a handful of occupations that are not covered, including:

  • Movie theater employees
  • Local radio and television station employees
  • Agricultural workers
  • Domestic service workers
  • Taxicab drivers
  • Amusement park workers

Another set of workers are covered by distinct labor laws, and are therefore not covered by FLSA rules. These may include:

  • Rail or air carrier employees covered by the Railway Labor Act exemption
  • Truck drivers governed by the Motor Carriers Act

Tracking when your employee’s work is the best way to keep records of wages owed. Digital time tracking takes a key manual process that is time-consuming and/or error-prone and automates it, saving everyone time and shaving off the significant margin of error found in most construction companies’ payrolls. ExakTime can also help you determine whether an employee is owed overtime, along with paying non-exempt employees properly for their overtime due. ExakTime’s cloud-based software tracks workers anywhere with our mobile app or rugged clocks and manage it all in one place. The data is password protected that can be accessed from any computer and synced with any payroll program. Plus, it works with businesses of all sizes.