Nonexempt Hours Worked
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AOD EMPLOYMENT BULLETIN EB2016-4 ARCHDIOCESE OF DENVER (AOD) MANAGEMENT CORPORATION NOVEMBER 2016 EXECUTIVE SUMMARY – Nonexempt Hours Worked Unless otherwise stated, this bulletin does not apply to Exempt employees who are paid the same salary for any week in which they perform any work, regardless of the number of days or hours worked. This bulletin applies to Nonexempt employees (hereafter referred to as “employee”) who must be paid for every hour worked including overtime pay for hours worked over 40 per week. See EB 2016-2 for more information on exempt versus nonexempt employee status. Knowing what is included in “hours worked” will help to ensure employees are accurately paid under the law. Problems arise when employers fail to recognize and count certain hours worked as compensable hours. For example, an employee who remains at his/her desk while eating lunch, regularly answers the telephone and refers callers, is working. This time must be counted and paid as compensable hours worked because the employee has not been completely relieved from duty. An employee who works extra hours must be compensated for those hours. This is true even if they did not seek prior permission to work those hours and even if their employer asked them not to work extra hours. Employees should be required to obtain supervisor approval before working extra or overtime hours, and failure to do so can revert to a disciplinary issue. Nevertheless, the employee must get paid for all hours worked. Time Sheet – A Key Document! All PART-TIME employees, all NONEXEMPT employees, and all HOURLY employees are required to submit a time sheet for all hours worked. Time sheets should be signed by the employee and their supervisor before submission to payroll to ensure the hours worked are correct. Time sheets help to ensure that nonexempt employees are paid at least minimum wage and are paid time and one-half for overtime hours. Just as importantly, the employer must monitor part-time employees’ hours to ensure that their average hours worked are less than 30 hours a week and do not qualify for full-time benefits, including healthcare under the Patient Protection Affordable Care Act (PPACA). Exempt vs. Nonexempt – A Guide for Employers Page 2 Hours Worked The following is a list of compensable time under the Fair Labor Standards Act (FLSA) which must be paid to a nonexempt employee for actual hours worked. A nonexempt employee must be paid for all hours worked even if the work was not requested by the employer. For example, an employee may voluntarily continue to work at the end of the shift to finish an assigned task or to correct errors. The reason is immaterial. The hours are worked and are compensable. As a consequence, however, the employer should direct the employee to request permission prior to working extra hours and may discipline the employee for continuing to work extra hours without permission. Refer to “Employee Volunteer Policy” later in this bulletin for information on employee volunteer rules. Regular Hours Worked – An employee is paid for hours worked, and for paid time off (PTO) if available, at their regular hourly rate of pay for all hours up to 40 per week. Overtime Hours and Rate Defined – An employee is paid at a rate of one-and-one-half times their regular rate of pay for all hours worked over 40 in a week, or over 12 in one day. Effect of Paid Time Off (PTO)/Holidays - The employer does not count paid time off when determining overtime hours worked. For example, an employee who submitted a weekly timesheet showing 47 total hours consisting of 39 hours worked during a workweek and an 8-hour holiday would not be due overtime. The employee would be paid for 47 hours at their regular rate of pay. However, if there was no holiday and the employee worked all 47 hours the employee would be due 7 hours of overtime pay. An employer is not allowed to provide compensation (comp) time in lieu of overtime pay – the employee must be paid for overtime worked. However, the employer is allowed to provide time off to an employee who has worked or is anticipated to work overtime WITHIN THE SAME WORKWEEK in order to manage overtime costs. For example, in one work week, if an employee will work 40 hours in four days, the employer may give the employee the fifth day off. Waiting Time – Waiting time may or may not be compensable depending on the particular circumstances. If the employee is “waiting to be engaged” such as an employee who arrives early, before normal business hours, and the doors are locked preventing the employee from working, this is not work time and the employee is not required to be paid for this time. If the employee is “engaged to wait” such as for periods of inactivity when a receptionist reads a book while waiting for calls or visitors, this is work time and should be included in actual hours worked. Exempt vs. Nonexempt – A Guide for Employers Page 3 On-Call Time – An employee who is required to remain on call on the employer’s business premises or is otherwise restricted from using their time for personal purposes is working while “on call”. However, if an employee is not completely restricted from personal use of time but is only required to remain on call within a reasonable time or distance from the employer’s premise or allowed to leave a message where he/she can be reached is not, in most cases, working while on call. Paid Rest Periods – Rest periods of short duration are common, promote employee efficiency and are customarily paid as hours worked. Colorado (A) minimum “paid rest period” requirements prescribe a paid 10-minute rest period for each 4-hour work period, as practicable in the middle of each work period. However unauthorized extensions of rest period breaks need not be counted as hours worked. The employer must clearly communicate the authorized time period, that any extension will be not be paid, and as part of best business practices, that the employee will be subject to discipline for repeated infractions. Meal Breaks – Bona fide meal periods, which are usually 30 or more minutes in length, generally need not be compensated as time worked presuming the employee is completely relieved from duty for this purpose. If the employee is required to perform any duties, whether active or inactive, while eating, then this time counts as time worked. Colorado(A) minimum length of meal periods requires ½ hour if work shift exceeds 5 consecutive hours. If it is impractical for the employer to provide an uninterrupted meal period, the meal period will be counted as hours worked AND the employee is to be allowed to fully consume an “on-duty” meal of their choice. It is recommended that an employee not be allowed to take a meal break at their desk. Sleep Time - An employee who is required to be on duty for less than 24 hours is working even though he/she is permitted to sleep as long as the employee is on duty and must work when required. An employee who is required to be on duty for 24 hours or more (such as for a weekend youth retreat) may have up to 8 hours (the maximum) excluded from overtime pay provided that: The employer has an express (preferably written) policy excluding sleep time. Adequate sleeping facilities for an uninterrupted night’s sleep are provided. At least 5 hours of sleep are possible during the scheduled sleep period (if not, the employee will be compensated for the entire day). Interruptions to perform duties are considered time worked. (A) Colorado minimum wage, overtime, paid rest periods and meal breaks applies to employers in the following industries: Retail and Service, Commercial Support Service, Food and Beverage, and Health and Medical. However Federal labor laws are not limited to these industries. When federal and state labor laws differ, the law providing the most benefit to the employee takes precedence. We recommend that the employer use the state minimums where applicable. Exempt vs. Nonexempt – A Guide for Employers Page 4 Staff Meetings, Employer Functions, Lectures and Training Programs – Attendance at employer-required (non-voluntary) functions is included in compensable hours worked. Attendance at employer events will not be counted as hours worked if 4 criteria are met: The activity is outside normal work hours The activity is voluntary The activity is not job related No other work is concurrently performed Therefore, an employer should clearly define normal work hours (e.g., 8 a.m. to 5 p.m. with a one-hour meal break) and clearly communicate whether an employee is required to attend the function as a part of their job. For example, if staff are required to attend a retreat which includes Mass then this is included in hours worked. Voluntary Mass attendance during normal work hours can be treated as time worked ONLY with prior supervisor approval. If staff voluntarily attend Mass outside of normal work hours this will not be counted as hours worked. Travel Time – All travel time spent at the control or direction of the employer, excluding normal home to work travel, shall be considered as time worked. Travel time may include the following scenarios: Home to Work on a Special Day Assignment in Another City: An employee who regularly works at a fixed location in one city is given a special one-day assignment in another city and returns home the same day. The time spent traveling to and returning from the other city is work time, which can be reduced by the time the employee would normally spend commuting to the regular work site.