Even inside my own HR company, I face the challenge of getting everyone to clock in and out properly.
- Charging penalties when employees clock in incorrectly
- Failing to pay employees on time because of their mistakes
- Using a biometric clock to prevent employees from clocking in early and clocking out late
Penalties. In most states, deducting pay from paychecks to penalize employees for registering their time improperly violates wage and hour rules. We are aware of a practice that penalized employees by making them pay out of pocket for time spent fixing an issue with their paycheck.
Hitting your employees in the pocket might seem like a smart and effective way to ensure they record their time accurately. But what if your attempt to teach them a lesson results in your being the one who is breaking a wage and hour law? And, what happens if your employees refuse to pay the penalty? Would you withhold their paycheck pending payment of the fine? Would you terminate? Withholding the check violates federal and state law, and termination exposes you to a lawsuit. Penalties of this nature aren’t such a smart idea, after all.
Withholding Pay. In most instances, it’s legal to adopt a policy informing employees that you may not revise or correct paycheck errors until the next pay period. However, employers must understand that it’s illegal to withhold or delay an entire paycheck as a punitive measure. Employers must also pay for hours worked based on your own state rules. Almost all states also set time periods in which employers must pay for hours worked and recorded.
Time Tracking Devices. Programmable time tracking devices that prevent employees from clocking in early or clocking out late are legal. If that is the case, why do employees still prevail on Department of Labor (DOL) complaints when a biometric time clock is in place that limits the hours that will be recorded? According to the DOL, if an employee claims she/he worked hours you did not pay them for, you’re on the hook, regardless of your time tracking method. Additional problems arise where an employee works extra hours the employer is not aware of because they fall outside of the clock’s pre-set parameters. Although helpful, biometric clocks are not reliable. It’s better to address unauthorized hours proactively, using the following approach:
1) Adopt a properly written policy about unauthorized time worked. See the end of this post for an example.
2) When an employee works unauthorized hours, address it in writing. In some states, such as California, write-ups with employee acknowledments are very important because of the daily overtime rule. Documenting offenses reacquaints your employees with the policy and ensures you have critical documentation in case problems arise.
Milking the clock. After a second offense, issue a termination warning.
Failing to Clock In. Although you can’t penalize employees with fines, there are ways to hit them in the pocket. You can adopt a bonus policy that makes employees ineligible for bonuses if they do not comply with your other policies. Note that such a policy does not revoke or withhold a bonus already earned. Also, note that this is a policy of general application, and everyone is subject to its terms. When you draft a written warning for recording violations, inform the employee he or she is at risk of being excluded from the bonus for that week.
CEDR offers a resource called The Employer’s Toolkit at our website. In it, you will find a bonus policy with clearly defined eligibility requirements. Access the Toolkit via our website, www.cedrsolutions.com.
Sample Overtime Policy
At times, you may be requested to work overtime in order to meet the needs of the Practice. However, working overtime is generally discouraged. Exempt employees are not eligible for overtime pay. Non-Exempt employees must have all overtime approved in advance and reported on the time sheet for that pay period. Non-exempt employees will be paid at their regular rate, plus one-half for hours actually worked in excess of 40 hours in a work week, or as otherwise prescribed by state law. Paid time off, such as vacation, personal days and holidays are not counted for overtime.
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- What are your state rules?
- What if they change?
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Because employee handbooks do not update themselves, and employee problems are often risky and seldom easy, we give our members affordable and easy access to the CEDR Solution Center. Learn more here.
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