March 8 (Spring Forward) CAN totally screw up your pay!
Good morning, Ladies and Gentlemen. This is Rhamy Alejeal, for the People Processes podcast. We dive deep into the tools, laws and yes processes that you need to know in order to scale and grow your organization.
This is going to be a super quick episode, consider it a quick update. I just want to throw this out there. Time to change. Don’t forget to change your payroll clocks. I know everyone knows about Daylight Savings Time, but a lot of people miss out on some key facts. If you are running a 24 hour operation, this can really really affect your business. So let’s think about this. Daylight Savings Time begins Sunday, March 8 2020, when our clocks are going to move forward one hour at 2:00 a.m. local time. On Sunday, November 1, the clocks are going to shift again, when the clock moves back one hour.
These days, technology has changed, and has lessened the chore of changing clocks. I mean, when I first got into this business, people were walking around changing their punch clocks. It’s crazy. But, smartphones, appliances and many clocks are now programs to automatically adjust for the time change. However, adjusting your payroll timekeeping is not quite so automatic. Many employers simply ignore the clock changes, reasoning that an employee’s pay will even out over the course of the year, that’s not necessarily the case—and it’s not the law.
Hourly workers on duty when the clocks change on March 8 will put in one fewer hours than normal. If they worked, I don’t know, 10pm to 6am, that’s eight hours right? But wait, we’re moving forward an hour, they’re only going to work seven. For example, shift workers on an eight-hour shift are going to actually work one hour less. So I just went over, well, workers are not required to be paid for the hour that they don’t work, many employers choose to ante up for that hours pay anyway, because their system doesn’t track it and they don’t think about it. You can totally do that. However, if they treat it like a normal hour’s pay, you can run into problems and cheat yourself under the wage hour rules, an hour that is not worked does not have to be counted in determining hours worked for overtime purposes, even if the worker is paid for that hour. And the pay for the hour does not have to be included in computing the worker’s regular rate of pay for the pay period. On the other hand, since the pay for the extra hour is not compensation for an hour worked, the pay cannot be credited toward any overtime pay due to the employee. So if you pay it, totally can, but don’t adjust your overtime basis for that. Okay. It’s like a PTO hour, it doesn’t go towards their regular work hours. It’s a bigger deal in the fall.
I wanted to bring this up. Now on a quick episode. When the clocks change in November, shifter workers will actually put in an extra hour. That’s a lot harder. Employers that pay only the normal shift rate will be cheating their employees—and they’ll be breaking the law. The Department of Labor has ruled that workers must be paid for all hours worked during the time-changing shift. What’s more, for overtime purposes, the additional hour must be counted in determining the total number of hours during the work week. So come into the year or November.
Anyway, we got to be the other way around the long and short is check your settings, know what you’re going to do. Just have a plan. Don’t let this catch you off guard. If you have 24 hour shifts, your overnight shift is going to be working one hour less. It’s your call on whether you pay that hour or not. But if you do, don’t adjust your overtime for it. That’s it. Super quick update. Thank you for tuning in. Check us out on Twitter, LinkedIn, Facebook/peopleprocesses. Love to hear from you. Ask us any questions you have on there. In the meantime, check us out @peopleprocesses.com. Subscribe to get some subscriber only content. Go out there. Have a great day and get your work done.
About the author, Rhamy
Rhamy grew up watching and working with his mother and grandmother in the senior insurance market. This familiarity with the struggles faced by people trying to navigate the incredibly complicated and heavily regulated healthcare market led him to start Poplar Financial while working on his degree at the University of Memphis. After completing his MBA and Bachelors in Finance and Economics, Rhamy guided Poplar Financial through the disruptive opportunity that is the Affordable Care Act. Since then Poplar Financial has received numerous awards from major insurance carriers and has completed its fourth year in a row of doubling in size. Now his team focuses on the processes around human resources and specializes in providing companies with between 20 and 1000 employees with the payroll, benefits, and HR needs.