Hiring

Fall Back: Time to Examine Timekeeping Practices

Daylight Savings Time (DST) runs from the second Sunday of March to the first Sunday of November. So, what does this mean for employers? The key concern for employers is how the change impacts hourly (non-exempt) employees who work during the time change. Most states participate in daylight savings time. Those employees working the graveyard shift when Daylight Savings Time begins work one hour less because the clocks are set ahead one hour. Those employees working the graveyard shift when DST ends work an extra hour because the clocks are set back one hour at 2:00 a.m.1

The Fair Labor Standards Act (FLSA) requires employers to credit and pay employees for all hours worked. For an employee who is on duty at 2:00 a.m. when Daylight Savings Time starts in the Spring and the clocks are moved up an hour, this typically means the employee will work one hour less that shift/week. Although an employer may choose to pay the employee for the normal number of hours in the employee’s shift, this is not required. If an employer does choose to pay the employee for this extra hour, even though it was not worked, the employer does not have to include the extra hour in the employee’s regular rate for calculating overtime. This is pursuant to 29 U.S.C. 207(e)(6), which excludes certain payments from the definition of “regular rate.” This extra hour of payment is also not considered a “premium” payment, so an employer cannot receive a credit to use toward overtime compensation under 29 U.S.C. 207(h)(2).2  In the Fall, when we set our clocks back an hour, an employee may actually work the extra hour (i.e. 9 hours on a 8 hour shift). The employer would have to either pay them overtime or reduce their schedule for that day. If overtime is worked, the employer might have to pay overtime (premium) for that extra hour worked.

This year, Daylight Savings Time ends on Sunday, November 3, 2019 and at 2:00 a.m. we fall back and change the clocks back an hour.  But it hasn’t always been this way. Daylight Savings Time was formally adopted in the U.S. as ‘An Act to preserve daylight and provide standard time for the United States‘ on March 19, 1918. That section of the act was repealed the following year, and DST thereafter became a matter left up to local jurisdictions.

DST was observed nationally again during World War II but was not uniformly practiced after the war’s end. Finally, in 1966, the practice of turning back the clock one hour in the fall became a federal law in the United States under President Lyndon Johnson, who signed the Uniform Time Act in 1966. It also allowed individual states to remain on standard time if their legislatures allowed it. Most U.S. residents abide to the one hour forward in spring and one hour back in fall. However, residents of Arizona and Hawaii—along with the U.S. territories of Puerto Rico and the Virgin Islands, among others—do not abide to this practice. 3

The decision is still out on whether “falling back” is advantageous. Claims that it helps to conserve energy are ambivalent. The time change doesn’t increase the number of hours of daylight per day. However, it does present an excellent opportunity for employers to examine their timekeeping practices regarding nonexempt employees.

We stay up-to-date on employment laws, so you don’t have to. ClearPath can help you design a solution pertaining to your contingent workers. We can help relieve this burden by outsourcing your back-office Human Resources and Payroll functions to our Employer of Record service. Contact us to learn more about how our expert personalized service can let you get back to focusing on your business goals. Work with a leader in the industry for outsourced Human Resources and Payroll functions associated with W-2 and 1099 contingent workers. Let ClearPath be the path to your peace of mind. For other questions about assessing your workforce or conducting a review of your current hiring processes, the ClearPath team can assist you.

This blog article is for general information purposes only and does not provide an in-depth review of employment laws. It should not be solely relied upon or substituted for legal or professional advice. Use of the information provided is at your own risk.

Sources:

1 https://webapps.dol.gov/elaws/whd/flsa/hoursworked/screenEr11.asp

2 https://www.employerlawreport.com/2014/03/articles/wage-hour/daylight-savings-start-sunday-spring-forward-and-pay-employees-correctly/

3 https://www.nationalgeographic.com/news/2006/3/the-history-of-daylight-saving-time/#close