The definition of “hours worked” is set out under the Fair Labor Standards Act (FLSA). This legislation applies to eligible workers in the private sector and government roles. It covers overtime, minimum wage, and youth employment.

You can find more details on workers covered by the act in the exempt and non-exempt sections below.

The FLSA states:

“In general, ‘hours worked’ includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work.”

This means that you’ll need to pay your employees covered by the act for all time they spend carrying out duties on behalf of your organization.

The FLSA’s definition of hours worked applies to both work on your business premises and other locations, such as workers’ homes. Understanding this may be particularly important if you have employees working remotely or in a hybrid model.

Exempt and non-exempt workers

When it comes to determining hours worked under the FLSA, it is important to understand the difference between non-exempt and exempt workers. As the names suggest, non-exempt employees are covered by the act, while exempt workers are not.

In most cases, exempt workers are hourly employees who work shifts and whose pay depends on the number of hours they work. Correctly calculating hours worked is essential for paying these workers correctly and fairly. 

In contrast, exempt workers tend to be salaried employees in professional roles. In the majority of cases, these employees receive a set salary based on a contractual number of hours worked each week. Determining specific hours worked is less relevant for these employees.

Why Hours Worked Matter

In the interest of fairness, you must compensate your employees for all the time they spend working. In addition, there are several business benefits to understanding hours worked.

Employee retention 

Paying your employees promptly and fairly for all the time they have worked can help you retain top talent in your business. Conversely, if you consistently pay late or avoid compensating all hours worked you risk damaging your staff’s job satisfaction and engagement levels. 

Employee wellbeing

Understanding the number of hours your employees are working can help you identify anyone who may be overworked. Not only can working too many hours damage an employee’s physical health, but it may also leave them vulnerable to burnout.

Ensure you are legally compliant

If you fail to pay your employees their full wage entitlement, you could risk legal action from your staff or an investigation from federal authorities. In fact, the Department of Labor can order you to provide back pay to affected employees if you are found guilty of wage violations.

What Does ‘Suffered or Permitted to Work’ Mean?

The FLSA states that you must compensate your workers for “any additional time the employee is allowed (i.e., suffered or permitted) to work.”

This means that you will need to pay your employees for both overtime that you request them to work, and any hours necessary to complete their duties. 

For instance, you may not specifically request that an employee works beyond their set shift. However, you must pay them if you are aware they are doing so and the work benefits your business.

Say, for instance, you own a bookstore and you observe an employee working beyond their set shift when a large group of customers unexpectedly enters the store. In this example, there is a clear reason that this person needed to work and that you ‘permitted’ them to work.

Likewise, you may need to compensate your employees for any time spent responding to urgent emails or calling clients outside their set working hours. As discussed earlier, these activities will still count toward hours worked if they are carried out in an employee’s home.

Meetings, Training, and Events

If your employee is taking part in workplace training or attends a meeting on behalf of your business, this should be considered part of their hours worked. However, you will not need to compensate your employees if all the following criteria are met:

  • The event is outside of the employee’s usual working hours
  • Attendance is voluntary
  • The event is not work-related
  • No other work is carried out at the same time

Rest Breaks

Regular rest breaks for employees of between five and 20 minutes are common, although the FLSA does not regulate their provision. If you do offer breaks to your employees, you will need to include these as part of your employees’ hours worked. 

Remember, offering your employees short breaks will allow them to recharge and can be beneficial for their mental health and job performance.

If your employee takes a longer break than you have permitted, you will not need to count this unauthorized extension toward their hours worked. You will need to make it clear to your employees in advance that their breaks are a set length and that they could be penalized for taking a longer break.

Meal Breaks

If you provide your employees with a meal break, the FLSA states that you will not need to pay them during this time. According to the act, meal breaks typically last at least 30 minutes. However, you will still need to compensate your employees for this time if they carry out work while eating.

Sleeping Time

If your employees are working for less than 24 hours, they will still need to be compensated if they sleep or take part in non-work activities during quiet periods. 

When your employees are on shift for 24 hours or more, you may agree on a regular sleeping pattern of not more than eight hours. In this case, sleeping time will not count towards hours worked, provided it consists of at least five hours.

The act requires you to provide your employees with adequate sleeping facilities where they can rest without disruption. 

Travel Time

Whether you need to pay your employees for travel time depends on the type of travel. 

Day-to-day travel to and from your premises does not count as hours worked.

If an employee routinely works in one city and is expected to travel to another for a one-day obligation, this travel will count towards hours worked. You may, however, subtract the employee’s usual commuting time from the hours spent traveling to their one-off assignment.

Aside from this, you will not need to compensate your employees for time spent as a passenger on a plane, train, bus, or in a car outside of working hours. 

On-call Hours

You will need to compensate your employees for any time they are on call if they are required to stay at your official workplace. If, however, your employee is on call while in their own home, they are not usually considered to be working. 

The Importance of Record Keeping

Under the terms of the FLSA, you’ll need to keep records of all the hours that your employees have worked and their corresponding pay for a minimum of two years. Likewise, you must also ensure that it is available for government inspection if requested.

This information includes:

  • Timecards
  • Work tickets
  • Tables containing rates of pay
  • Employee rotas

Methods of Tracking Hours Worked

You can choose any method for recording an employee’s hours as long as the information is accurate and complete. There are several options available, including:

  • Asking employees to keep a written log of their hours
  • Paper-based timecards
  • Allowing employees to enter their hours worked into a spreadsheet
  • Time-tracking software

You can find an example of an acceptable format for timekeeping records on the FLSA website.

The benefits of time-tracking software

If you want to ensure accuracy when monitoring hours worked, time-tracking software is the most efficient means of doing so. If used correctly, this software can track your employees’ time to within a second. 

Time-tracking technology also has several other benefits. It can, for example, provide insights into projects on which your business may be spending too much, or too little, time. 

Likewise, you may notice that an individual is devoting more time to certain tasks than their colleagues. In this case, it’s possible that person may need additional training.

Conclusion

The concept of hours worked may appear simple at first glance, but, there are several factors you’ll need to consider when calculating these figures. You will, for instance, need to be aware of which tasks do and do not constitute hours worked. In addition, you’ll need to choose the best method of time tracking for your business.

Remember that a thorough understanding of hours worked is essential for the success of your business. If you make a mistake in this area, you could find your employees are not fairly compensated for their time or that your business overspends on labor. In a worst-case scenario, you could expose your company to legal action from your employees or an investigation from labor standard authorities.

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