HUMAN RESOURCES

When Do I Have to Start Paying My Hourly Employees?

Trying to save a few bucks by skimping on paychecks is not a good move.
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Dear Evil HR Lady,

When does a company have to start paying their hourly employees if there's a period of time before they can clock in? These employees are located away from the head office and the head office does not have any kind of access to records proving when they arrived at their job site--like security badge scans.

Right now, employees have to arrive on site and log onto their computers before they can "clock in." Sometimes this can take up to 20 minutes (depending on their computer, how busy the network is, etc), but they aren't doing any actual work while waiting for the computer to boot up. Do we have to pay them for this time?

This question just screams two things: 1) Management is stingy as all get out, and 2) There are serious trust issues at this company. Both are extremely serious problems and both can easily get the company into some really hot water.

The first problem is likely to lead to legal trouble, according to Employment Attorney and author of Stand Up For Yourself Without Getting Fired, Donna Ballman. She said:

This issue arose recently in a case where Hilton Reservations Worldwide, LLC ended up paying out over $715,000 as a result of failing to pay employees for time worked before clocking in, including booting up computers. TD Bank was sued recently for similar violations. Farmers Insurance was hit with over $1.5 million in back wages for failing to pay for pre-shift and post-shift activities.

Managers that try to nickle and dime their staffs to death would be wise to read that paragraph above multiple times. "Saving" money now can result in larger payouts later on. Not only do these companies have to pay out these large judgments, but the legal costs involved can be tremendous. This method not only doesn't save money, but it ends up costing more.

The Department of Labor issued a fact sheet about call center employees, but the guidance doesn't apply just to call center employees. It applies to any employee in a similar situation, including yours. The DOL states that employers have to pay for any time an employee must be on duty, and specifically states  "starting the computer" is a work task. In other words, you require them to do this task, so you must pay them for it.

Attorney Ballman offers further counsel for companies trying to cheat their hourly workforce out of a few bucks:

Here, since the boot-up time is 20 minutes, this employer will have a hard time arguing that the time spent is de minimis. We're talking an extra hour or two a week. That's significant. If the employee is required to boot up the computer, then the time spent booting up should be paid. If the employer wants to avoid paying this, then they should arrange to have all the computers booted up before employees arrive. Otherwise, this employer must keep accurate time records of the time employees work, including boot-up time, and must pay for that time worked.

Which brings us to the other problem with this  the scenario: Management doesn't trust the employees. You don't need badge scans to know what time an employee arrives on site unless you think your employees are going to lie to you about it. And the only reason you should think that is if they have been lying about their arrival times in the past. They haven't been, because you haven't been paying them for that time anyway, so why do you fear that, without a computer record, you can't trust them?

I suspect the answer is tied up in the fact that company management is actively trying to cheat the employees, by not paying them for a significant amount of work time. They know they are being sleazy in doing so, so they assume that everyone acts like they do. It's not true. If you treat your employees well, they are unlikely to lie to you about their arrival times.

If everyone else says, "I arrive 10 minutes before my computer is ready, so that I have time to log on," except for Bill, who says, "It takes 45 minutes to get my computer on to the network!" the solution isn't to make everyone take log on time as unpaid. It's to have IT check out Bill's computer and then, if that doesn't solve the problem, discipline Bill.

In short, pay your employees from the moment they walk in the door, and trust that they are mature and honest enough to tell you when that is.

Have a workplace dilemma? Send your questions to EvilHRLady@gmail.com.

Last updated: Aug 6, 2013

SUZANNE LUCAS | Columnist

Suzanne Lucas spent 10 years in corporate human resources, where she hired, fired, managed the numbers, and double-checked with the lawyers.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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