Employers that have strict rules about work hours may be familiar with a certain scenario: Sometimes hourly employees clock in before they’re supposed to or work through their lunch breaks, despite the handbook discouraging this practice.
While an employee might disregard guidelines, employers cannot simply opt not to pay that employee for time worked, David Kalteux, labor and employment attorney at FordHarrison, told HR Dive, after sharing similar advice on LinkedIn. His recommendation is simple: “When in doubt, pay the employee.”
In an ideal world, employers would be able to rely on general counsel or a specialist in HR compliance before making a call, Kalteux said, but that isn’t always possible.
Often, employers will try to “teach an employee a lesson by not paying them for clocking in early or for not taking their lunch break,” Kalteux said. “You'll see them cut this time from their payroll, which is against the law.” He said employers even occasionally withhold money from a cashier if the till comes up short — sometimes rendering a paycheck that falls below minimum wage.
Kalteux is referring to the Fair Labor Standards Act, which requires that employers pay covered nonexempt employees overtime for hours worked beyond 40 hours per workweek, pay minimum wage and pay for compensable time.
So what can an employer do if an employee continuously flouts workplace wage and hour rules? Pay the employee, address it after the fact, create documentation and terminate if desired if the practice continues, Kalteux said.
“A lot of small companies think, ‘Hey, I can just pay my janitor $800 a week’ — or whatever it is — ‘and I don’t have to keep track of his hours, I don’t have to pay him overtime.’ That’s not how it works.”
Labor and employment attorney, FordHarrison
Wage and hour suits are “the new fad,” Kalteux said. Florida has long been a hotbed for FLSA claims, but “we’re seeing them almost every day” in the state, where Kalteux is based, and throughout the Southeast, he said. “Let's say you cut an employee's time — even if they recover one hour of that time, the lawyer can still get his entire attorney's fees,” he said, pointing to the incentives for labor lawyers to take up such cases. “A lot of times it just makes sense for the employer to resolve [these cases] rather than going through all the motions of a lawsuit, which can be very costly,” he added.
Employers also put themselves at risk of class-action suits if they apply a standard broadly, dinging each employee individually for working unauthorized hours by withholding wages. Often, employers are “trying to pinch pennies, and you can break the piggy bank if you do it the wrong way,” Kalteux said.
More broadly, Kalteux said “by far” the biggest wage and hour misunderstanding employers have is not understanding the difference between nonexempt and exempt workers.
“A lot of small companies think, ‘Hey, I can just pay my janitor $800 a week’ — or whatever it is — ‘and I don’t have to keep track of his hours, I don’t have to pay him overtime.’ That’s not how it works,” Kalteux said. “To be exempt, you have to meet certain duties requirements under the FLSA.” He’s seen even law firms mess up in categorizing workers, he said.
In other words, the FLSA is confusing. But the legal system is not built to be forgiving. So remember the mantra Kalteux developed: “When in doubt, pay your employees.”
Kalteux first shared his advice in a post on LinkedIn.