Federal and state laws require that employers pay employees for all hours worked. They define “hours worked” broadly to include (a) all time during which an employee is required to be on duty, on the employer’s premises, or at a prescribed workplace; and (b) all time during which an employee is permitted to work, in either express or implied permission. When employees file claims for unpaid time worked, the burden is on the employer to show that all work hours have been properly recorded and paid. Without records, no matter how much good faith is involved, the employer is subject to potentially vast liability for as much as six (6) years for all employees hired during that period including those who are no longer employed! One way to establish a record of an employee’s time worked each shift, is to use contemporaneous time records that show the precise time that the employee started and stopped work for the shift, and took extended dutyfree breaks from work, like meal breaks. Companies may want to adopt the important policies and practices below.

Timekeeping Systems

• Adopt a system that contemporaneously records the time worked by employees each shift;

• Record the time that the employee starts work and stops work for each shift each day;

• Records the time when an employee stops work to take a dutyfree meal break, as well as the time when the employee resumes work after the end of the meal break;

• Record the employee’s total number of hours worked each workday and his or her total number of hours worked each workweek;

– If an organization uses a rounding system;

– Check the rounding interval the company is using (e.g., five (5) minutes, six (6) minutes, and fifteen (15) minutes). Consider switching to the smallest interval practicable;

– Ensure that the company provides a grace period for late clockins that is equal to the rounding interval for early clockins. For example, if employees can clock in five (5) minutes early, are they also able to clock in five (5) minutes late without adverse consequences?

– Document the rationale for using systems that don’t record actual time worked, like autodeduction systems for meal breaks and systems that record employee’s assigned schedules.

Timekeeping Policies

• Implement policies that expressly;

– Require employees to accurately record all time worked;

– Require employees to accurately record all dutyfree time (e.g., when they clock out for meal breaks and clock in from meal breaks);

– Prohibit offtheclock work;

– Prohibit working overtime hours without the express permission of management;

– Require employees to promptly report to human resources any questions or concerns regarding the accuracy of their records of their time worked and dutyfree meal breaks taken;

– Prohibit employees from falsifying time records; and

– Prohibit any retaliation against any employee who raises questions or concerns about the employer’s timekeeping policy.

• Consider whether certain activities qualify as compensable time, including the following:

– Setting up tools or supplies;

– Traveling;

– Training;

– Attending meetings;

– Waiting for assignments;

– Taking meal and rest breaks;

– Onboarding;

– Going through security checks;

– Logging in and out of company systems;

– Using companyissued mobile technology;

• Checking emails and voicemails

• Responding to emails and voicemails

– Remaining oncall;

– Donning and doffing required uniforms or personal protective equipment;

– Completing required paperwork; and

– Closing and opening procedures.

Timekeeping Practices

• Ensure that all employees receive the company’s timekeeping policies and provide their signed acknowledgement of receipt of the policies;

• Train employees on timekeeping policies;

• Train managers on the timekeeping essentials:

– Always follow the company’s timekeeping polices;

– Never encourage or require off-the-clock work;

– Require accurate reporting of time worked;

– Provide the opportunity to take meal and rest breaks as required by applicable law;

– Report all employee complaints about timekeeping to human resources or other designated management personnel; and

– Never retaliate against employees for reporting concerns about timekeeping practices.

• Develop and implement an effective complaint procedure through which employees can report timekeeping concerns;

• Develop a regular auditing process to review time records and related edits;

• Consider adding a class action waiver in arbitration agreements; and

• Designate and train personnel who will handle questions and complaints from employees about the timekeeping system.

Timekeeping Data

• Learn the reporting or “flagging” capabilities of the company’s timekeeping system;

• Create a list of categories of information that a company may want to audit for potential risks, including, especially, meal break compliance, early punchins, cell phone use, and excessive overtime;

• Designate and train personnel to serve as the point of contact for receiving and evaluating concerns identified by the timekeeping system; and

• Establish how long the company will maintain its timekeeping data, typically three (3) years.

Establishing and Reviewing a Nonexempt Employee Timekeeping System

Alfred T. De Maria