If you own a business with non-exempt or hourly workers, it’s important to understand your time and pay obligations. Under the Fair Labor Standards Act (FSLA), non-exempt workers must be paid for all hours worked and receive overtime pay for anything over 40 hours in a workweek.
But it’s not always black and white. How do you handle training, special events and travel? Does the law require you to compensate your employee in these instances, and what specific conditions apply? Does it matter if the training or special event occurs during regular work hours or after? How do you determine how much of this time is “compensable” or paid?
What Constitutes Compensable Time?
Compensable time is defined as any time an employer permits or allows an employee to perform a work activity. It can be at work, at home or on the road. Whether the time worked is compensable depends on whether the employer required the employee to perform the activity — or the employee did the task voluntarily.
Non-compensable time generally includes any time that‘s “off the clock,” and includes attendance at any event or training that isn’t mandatory. But there ARE circumstances that aren’t so clear.
Business owners must keep track of their employees’ hours and pay them correctly for all hours worked. It’s also important to make sure you aren’t paying for hours that should have been off the clock in the first place.
10 Traps to Watch Out for with Non-Exempt Employees
1. Off-the-clock time: Non-exempt workers must be paid for all time worked, but what if they arrive to their shift early and start working? According to the FLSA, employees must be paid for that time if they perform work. So it’s important to let employees know they aren’t allowed to work “off the clock.” This includes answering emails from home or taking work home to catch up.
2. Attendance at receptions, dinners, social gatherings: If the gathering is mandatory, it’s considered compensable time. But if it’s optional, a non-exempt employee doesn’t have to be paid. Managers shouldn’t pressure non-exempt employees to attend events that aren’t required.
3. Travel as a passenger during non-shift hours when no work is performed: Employees who travel on airplanes, trains, boats or cars before or after work and perform no work while traveling aren’t entitled to compensation.
4. Travel during work hours: Employees who travel to a business-related, out-of-town function during work hours — or from job site to job site — are entitled to compensation for hours above and beyond their regular commute to work.
5. Volunteer activities: Team-building opportunities must be paid if the activity is deemed mandatory for non-exempt employees. But if an employee volunteers at a company event (and is not REQUIRED to volunteer), the time isn’t compensable.
6. Working while commuting: An employee who’s required to work while commuting must be paid for the hours worked. So an employee who edits a project report while riding the train must be paid for that work.
7. Attendance at social events: Employers who host happy hours or networking events must pay non-exempt workers for attending, if their presence is required. If the event is optional, employees aren’t entitled to pay, even if they attend.
8. Training and seminars: Attendance at such events is considered working time, unless all of the following conditions are met, according to the FLSA:
- Attendance is outside of the employee’s regular working hours
- Attendance is voluntary
- The course, lecture or meeting isn’t directly related to the employee’s job
- The employee does not perform any productive work during such attendance
9. Medical attention: Time spent receiving or waiting for medical attention while at work is compensable. For example, if an employee suffering from a migraine headache is directed by a supervisor to rest at his desk for 20 minutes, he should be paid for that time.
10. Internships: Interns are generally unpaid volunteers who offer their time to gain job experience or receive academic credit. But the classification gets murkier when an intern essentially fills the job of a paid employee. In those instances, the intern’s time is likely to be compensable.
Keeping Track of Time and Attendance Can Be Easy
Electronically track your employees’ compensable hours and schedules with TrackSmart. You can easily schedule employee training and other mandatory events to ensure non-exempt employees’ hours and overtime are accounted for as well.
