It’s great when employees follow their schedules, but some employees don’t always follow these rules. 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.
What is working off the clock?
Working off the clock refers to any work-related activities for which an employee doesn’t receive overtime pay because they are conducted outside their scheduled hours.
For example, if an employee works from 9 a.m. to 5 p.m. ( work time), but comes at 8 a.m.( pre-shift work ) and leaves at 6 p.m.(post-shift work) to finish a project and isn’t paid for the additional work hours, that would be considered working off the clock.
According to the Department of Labor (DOL), employees must be paid for all extra hours worked, including working through their lunch break. If an employer doesn’t pay their employees for working off the clock, the employees can file a lawsuit for unpaid wages against their employer, which can be costly for the business.
Why do employees work off the clock?
While there are several reasons why your team might do off-the-clock work, 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 job duties done, even if this means staying over their schedules. One common example of this is when the boss assigns a task to a salaried employee that must be completed by the end of the workday. If the employee is unable to finish the task, they may feel pressured to get it done before the next day, so they’ll stay late to finish the project, which usually ends up being unpaid overtime. This can encourage the employee to work off the clock to finish the task and to make their manager happy and reduce the chances of losing their 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 finish a project. Instead of asking to work overtime or to have the task completed the following day, your 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 these unapproved and unpaid hours to get ahead to outshine their co-workers. However, this is often an ineffective method for appearing efficient as the employee ends up taking more time to complete the same task than 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. Cleaning up your workspace and preparing work for the next day after the shift is complete can also count as working off the clock. However, it’s important for small business owners to prevent these situations by providing training for all employees and reviewing off-the-clock policies so that everyone understands what defines that type of work and how to record time correctly.
Is working off the clock legal?
Working off the clock 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, when an employer’s insurance only covers non-exempt employees for injuries that occurred during their schedules or regular business hours. If the employee gets injured while working off the clock at the employer’s premises, the employer may be liable to cover the employee’s expenses if they are sued. Also, as we already said, the employee could file a lawsuit for back wages against the employer. The company will then have to pay not only legal and attorney’s 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 federal law for a company to make a non-exempt employee work off the clock and not compensate them for their work. The Fair Labor Standards Act (FLSA) requires employers to pay non-exempt workers at least minimum wage for the hours worked and time and a half of their regular rate for any hours worked over 40 hours in the workweek.
Working off the clock and 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 completing projects or very important tasks done that impact 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 necessary steps to boost 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.
Working off the clock and payroll concerns
Working off the clock can also have an adverse impact on 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.
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.
Therefore, it’s critical for small business owners to take the necessary steps to prevent working off the clock and avoid these situations.