In a couple of weeks, daylight saving time will end and most of us will “fall back” an hour. While many of us will simply be concerned with resetting clocks, employers will want to consider how they handle their nonexempt employees. Here are a few issues to keep in mind.
Nonexempt employees who are working when the time changes on November 3 might be entitled to an additional hour of pay. If a shift takes place when 2:00 a.m. becomes 1:00 a.m., employees will have effectively worked that hour twice (and that "extra" hour will carry over throughout the remainder of the shift).
If a nonexempt employee does end up accruing an additional hour of work, that time will be added to the remaining hours worked. If that total time results in a workweek exceeding 40 hours or a workday over eight hours, employers must pay overtime.
The Fair Labor Standards Act (FLSA) requires that employees are paid one-and-one-half times their regular rate of pay for all overtime hours worked. For those who are paid on commission or receive tips or bonuses, this regular rate can be difficult to determine. When determining an employee's regular rate, employers must consider all compensation received in one workweek, including an additional hour of compensation accrued during the time change.
It might benefit employers to think about what it will mean when daylight saving time begins again in March next year. Nonexempt employees who are working when clocks "spring forward" may be entitled to one less hour of pay because they would not have worked from 2:00 a.m. to 3:00 a.m. However, if an employer decides to pay an employee for a full eight-hour shift when only seven were worked during a time change, that extra “non-worked” hour does not get applied toward any overtime compensation.
If you have any questions or concerns about how daylight savings time will impact your business, contact us at (248) 477-6300 or email@example.com.
Editor's note: This post was originally published in October 2019 and has been updated for comprehensiveness.