Employees Milking the Clock

Sometimes it’s a challenge of getting everyone to clock in and out properly.

Below are a few notes on issues common to time clocks, paychecks, and working overtime, including:

• 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. (Call CEDR for a sample policy)
2. When an employee works unauthorized hours, address it in writing. In some states, such as California, write-ups with employee acknowledgements 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.
   

Practical Solutions You Can Use Today

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.

Questions about what you read? Need help with a clocking issue at your practice? Call CEDR Solutions at 866-414-6056 or email us at info@cedrsolutions.com. We will help you figure out the best way to approach the employee causing the issues, and give you a script that you can use to help get him or her to self-correct. And if he/she does not self-correct, we can also help you let them go to pursue other opportunities.