It’s great when employees follow their schedules, but some employees don’t always follow these rules. But when an employee works off the clock, it can be costly and even pose legal issues for the employer. Thus, it’s important for small business owners to be aware of why off-the-clock work happens, what it means for the company and how to prevent it. Here are some important factors to consider:

Reasons for Working Off the Clock

While there are several reasons that explain why employees work off the clock, some stand out from the rest. Here are some of the most common reasons why employees work off the clock and how to remedy them:

  • Pressure From Management. When deadlines are critical but there is not enough time to complete work, employees may feel obligated to get their work done even if this means staying over their schedules. For example, if an employee’s boss assigns her a task that must be completed by the end of the business day and the employee is unable to finish the task, she may feel pressured to get it done before the next day. This can lead to encouraging the employee to clock out and finish the task off the clock to make her manager happy and reduce the chances of jeopardizing losing her job. However, pressure from management should be discouraged.
  • Catching up on work. One of the main reasons employees tend to work off the clock is to catch up with work or to finish a project. Instead of asking to work overtime or to have the task completed the following day, the employee may believe that it will be more beneficial to take the initiative to finish the project or task right away. Some employees also use this unapproved time to get ahead in an effort to outshine their co-workers. However, this often is an ineffective method for appearing efficient as the employee ends up taking more time to complete the same task as others. Instead, managers and employees should discuss issues with workload and performance.
  • Work Preparations. Many employers often do not consider that employees also need time to prepare for work. For example, this may include reading work emails or bulletin boards to stay up-to-date on tasks that need to be completed for the day. Preparing work for the next day after the shift is complete can also count as off-the-clock work. However, it’s important for small business owners to prevent these situations by providing training for all employees and reviewing policies so that everyone understands what defines off-the-clock work and how to record time correctly.

Legality

Working beyond permitted shift hours can also pose a legal issue for the company. That’s because employees can easily dispute pay for the time they worked at a later date and even be injured. For example, if an employer’s insurance only covers non-exempt employees for injuries occurred during their schedules or normal business hours but the employee gets injured while working off the clock, the employer may be liable to cover the employee’s expenses if they are sued. The employee could also file a lawsuit for unpaid wages against the employer. The company will then have to pay not only legal fees but pay higher settlement fees than if they had paid the employee for working overtime in the first place.

Moreover, it is critical to note that it is against the law for a company to make a non-exempt employee work off the clock and not compensate him for his work. The Fair Labor Standards Act requires employers to pay non-exempt employees at least minimum wage for the hours they work and time and a half for any hours worked over 40 hours during the week.

Employee Morale

Employee morale is also at risk when employees work off the clock. That’s because being overworked and underpaid only works to decrease employee morale. When employees work their scheduled hours but aren’t recognized for getting projects complete or very important tasks done that impacts the business or team, they may get discouraged and eventually lower their performance. This also doesn’t help that they aren’t getting the basic pay for their services. It also may lead to a pattern where the employee doesn’t perform the task as expected. Small business owners should take the steps to work at boosting employee morale by recognizing staff for improved performance. However, it’s still important to address working off-the-clock and discouraging this behavior by reminding employees of the policy and disciplining those who continuously break the rules.

Payroll Concerns

Working off the clock can also have an adverse impact on a small business’ payroll. That’s because when an employee works off the clock, the actual work hours aren’t being recorded, and this can lead to inaccurate payroll record keeping. For example, if an employee has been working off the clock each week for two hours for three months, then when the issue gets corrected on the payroll, it can amount to a significant labor cost the company will have to pay. To avoid and minimize these situations, small business owners can use advanced technology that tracks schedules, tracks employee time worked, and helps manage payroll effectively with shift schedulers like Homebase.

Final Thoughts

Having employees work off the clock doesn’t benefit companies in the long run. From accidents and injuries that can lead to lawsuits to owing back pay for overtime, there are too many legal and financially risky factors that can leave small businesses in a bind. It also doesn’t improve employee morale, which can reduce performance over time. Thus, it’s critical for small business owners to take the necessary steps to prevent working off-the-clock to avoid these situations.

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