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'Must I Pay an Employee for Unauthorized Overtime?' and Other Timekeeping FAQs

To ensure employees are paid correctly and to comply with the Fair Labor Standards Act (FLSA) and state law, employers must keep accurate and complete records of time worked. Here are some frequently asked questions on timekeeping:

Q: What timekeeping records must my company retain?

A: Under federal law, employers must keep records with the following information for each non-exempt employee:

Hours of Work:

  • Hours worked each day
  • Total hours worked each workweek
  • Time and day of week when employee's workweek begins

Wages:

  • Basis on which employee's wages are paid (e.g. "$9 per hour," "$440 per week," "piecework")
  • Regular hourly pay rate
  • Total daily or weekly straight-time earnings
  • Total overtime earnings for the workweek
  • All additions to or deductions from the employee's wages
  • Total wages paid each pay period
  • Date of payment and the pay period covered by the payment

Identifying information:

  • Employee's full name and Social Security number
  • Employee's address, including zip code
  • Birth date, if younger than 19
  • Gender and occupation

Q: How long must I retain timesheets and other pay records?

A: Under the FLSA, the above records must be retained for at least 3 years, but payroll records required for tax purposes must be kept for at least 4 years. Timecards, timesheets, and other records on which wage computations are based must be retained for at least two years. Your state may require a longer retention period.

Q: An employee has failed to submit a timesheet. Can I withhold his pay?

A: No. Under the FLSA and many state laws, an employer must pay the employee for all hours worked on the next regularly scheduled payday, regardless of whether the employee adhered to the company's timekeeping procedures. If an employee fails to submit or sign a timesheet, ask the employee and his or her supervisor to immediately provide you with the hours worked and make sure the employee is paid accordingly.

Q: I just received an employee’s timesheet indicating she worked 2 hours of overtime, but this overtime wasn’t approved by her manager. Our policy is that all overtime must be approved in advance. Do I have to pay the overtime?

A: Yes, you have to pay a non-exempt employee for all time worked, regardless of whether the time was authorized. You may, however, subject the employee to your company's disciplinary action policy for failing to get approval to work overtime, but in no case may you withhold pay.

Q: We have a policy that prohibits employees from punching in before 8 a.m. One employee has violated the policy by punching in a half an hour early. Can I refuse to pay him for the time before 8 a.m.?

A: The employee must be paid for any time worked. You may subject your employee to your company's disciplinary action policy for failing to follow company policy, but in no case may you withhold pay for any time considered “hours worked” under federal or state law.

Q: An employee forgot to punch in. She is a repeat offender. Am I required to pay her?

A: Yes, you must pay her for any time worked as you are not permitted to withhold pay for time actually worked. The employee’s time record should be updated to reflect her correct start time.

Q: If an employee punches in at 8:13 a.m. for an 8 a.m. shift, can we round their time to 8:15 a.m.?

A: The best practice is to track time to the minute worked. Some employers, though, choose to round employees' starting and stopping times to the nearest 5, 10, or 15 minutes. Under the FLSA, employers may round employees’ hours (to a maximum of 15 minutes) as long as it is shown that over time, the averages result in employees getting paid for all the time they actually worked.

Your rounding policy cannot consistently round in the company’s favor or result in the failure to count all the time employees have actually worked. Note: Some states may place limits on time rounding. Check your state law before implementing a time rounding policy.

Q: Do I have to include paid time off when determining whether an employee worked overtime?

A: Employers generally aren’t required to include paid time off when determining the number of hours worked. The FLSA requires employers to provide overtime pay to non-exempt employees whenever they work more than 40 hours in a workweek. A few states require overtime in additional circumstances, such as when working more than a certain number of hours in a day. So if an employee works 36 hours during the workweek and then takes 8 hours of paid time off, the hours worked for the workweek is 36 and the employee wouldn’t be entitled to overtime pay under federal law.

Q: Should we require non-exempt employees to clock out and then back in for meal periods?

A: It's recommended that employees use their timekeeping system to record meal periods. Because it's impractical to expect all employees to take the same amount of time for lunch each day, employees should clock out and then back in for lunch. For this reason, it is a best practice to avoid automatic deductions for meal periods (e.g., deducting 30 minutes each day for a meal period).

Q: Can I also ask employees to punch out for rest breaks?

A: No. Under the FLSA, if a rest break is provided, it must be paid. The Department of Labor (DOL) defines a rest break as any period lasting 20 minutes or less that the employee is allowed to spend away from work. The duration of the break is generally the sole factor used when determining whether pay is required, not the reason for the break.

Q: An employee forgot to punch out for a number of 1-hour lunch breaks. Can I simply deduct the time from the timesheet he submitted?

A: Before making any changes, you should determine whether the breaks were actually taken. Keep in mind that the employee must be fully relieved of all duties for the purpose of eating a regular meal. If the breaks weren’t taken and the employee worked through any part of them, the employee must be paid for the time.

Q: I have a non-exempt employee that occasionally responds to work e-mail after hours. How do I make sure he keeps track of that time?

A: If non-exempt employees have remote access to work e-mail, voicemail, etc., consider expressly prohibiting work during off-duty hours. If this is not realistic, consider requiring employees to obtain written permission from their supervisor before performing any work during off hours. If any work is performed, require the employee to log all such time. Practically speaking, this may require the employee to write down their hours and adjust their time records once he or she is back onsite.

Q: Can I require exempt employees to keep track of their hours?

A: Yes, employers are permitted to track exempt employees' hours. Some employers wish to do so for attendance and time off tracking purposes. However, employers are prohibited from making deductions from an exempt employee's pre-determined salary on the basis of hours worked. In other words, employers may track exempt employees' hours as long as their employees still receive their full salary in any workweek they perform any work.

Q: We have a hard time reading employees’ writing on timesheets and sometimes have to go to the employee and ask for clarification. Which timekeeping method should I use?

A: You are free to use any timekeeping method you choose, provided it is complete and accurate. Many employers have moved to an electronic timekeeping system to avoid this and other issues associated with manual timekeeping.

Conclusion:

Employers should review their timekeeping systems and practices regularly to determine whether they are effective in maintaining accurate and complete time records. It is a best practice to require employees to review their hours at the end of each pay period and to report any discrepancies to their supervisor as soon as possible.

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