7 Situations When You Must Pay Employees Even When They’re Not Working

7 Situations When You Must Pay Employees Even When They’re Not Working

Paying employees when they’re not actively working may not be anyone’s favorite topic, but it’s a crucial area of understanding in the world of employment and human resources.

Compliance with employment laws is vital, but so too is fostering a work environment that’s fair and equitable for all parties involved.

FLSA Guidelines: What the Law Says

The Fair Labor Standards Act (FLSA) has been the bedrock of employee rights for over 80 years, setting the foundations for minimum wages, overtime pay, child labor standards, and recordkeeping.

Central to FLSA is the concept of ‘hours worked,’ which extends beyond regular office hours. To understand when you must pay employees, it’s essential to understand the FLSA guidelines.

Understanding ‘Working Time’

The FLSA says that if an employee is ‘suffered or permitted to work,’ that time must be compensated. This includes regular working hours, as well as time spent waiting, on-call, or in training.

On-Call Situations

If an employee remains on the employer’s premises, or so close that they can’t use the on-call time effectively for their own purposes, it’s considered working time and they must be paid.

Off-Duty Use of Company Communications

Usage of company-provided cell phones, laptops, or other technologies can turn into hours worked if their usage is so pervasive that it’s effectively inseparable from their regular work duties.

Situations Requiring Employee Compensation

Employers can’t have a one-size-fits-all approach to compensation, and many well-intentioned managers might inadvertently violate labor laws without knowing it. Here are seven situations that can lead to employee compensation.

Mandatory Meeting or Training

Holding a meeting after hours or requiring an employee to attend a training outside of their regular shift means they’re ‘working’ and should be paid.

Administrative Work

Any work an employee does on paperwork, record-keeping, or other tasks that benefit the employer is considered working and should be compensated.

Waiting Times

There’s a fine line between practical waiting, like standing in line at a counter, where employees need to do nothing, and engaged waiting, like standing by at a work site. The latter must be paid.

Controlled Rest Periods

Short rest periods, or ‘coffee breaks,’ lasting under 20 minutes, are considered part of the workday, and usually must be paid.

Weather-Related Closures

If the workplace closes due to inclement weather, and an employee has reported for work or works a partial day, the FLSA requires them to be paid for a full day’s work.

Lulls in Workflow

Lulls may happen due to slow business, but if employees must be ‘on-call’ during these times, or if you ask them to come in on a lull day, they must be paid.

Security Checks

If an employer requires employees to go through security screenings before or after work, this time is generally considered hours worked, and employees must be paid accordingly.

Paid Leave Laws and Their Impact

Employee wellbeing is at the forefront of many legislative initiatives. Some of the most recent changes involve the expansion of paid leave benefits, such as sick leave, parental leave, and paid family leave.

FMLA and Paid Vacation Time

The Family and Medical Leave Act (FMLA) provides eligible employees with job-protected leave for specific family and medical reasons. This time is generally unpaid, but an employee can choose to use any accrued paid vacation time during their FMLA leave.

State Laws on Paid Sick Leave

The Family and Medical Leave Act (FMLA) provides eligible employees with up to 12 workweeks of unpaid leave a year. However, some states have adopted laws allowing or requiring employers to offer paid vacation time, which impacts employee compensation even when they’re not in the office.

Sick Leave and PTO Policies

Many states and municipalities have passed laws requiring employers to provide paid sick leave to employees. This time off is treated similarly to vacation time, meaning it is usually considered compensable and factored into an employee’s total worked hours for the period.

Impact on Remote Work

With the rise of remote work, it’s crucial to understand how paid leave laws apply to at-home work environments, ensuring that employees are paid fairly for their labor, irrespective of their location.

Best Practices for Employers

Navigating the complexities of employee compensation requires an understanding of the law and a commitment to fair labor practices. Here are some best practices to ensure your company is on the right side of employment law.

Educate Leadership and HR Staff

By training your management and HR team on FLSA requirements, you help them make informed decisions, avoiding costly infractions.

Review Policies Regularly

Employment laws change, and so should your company’s policies. Regular reviews and updates are essential to keep your business practices aligned with the latest legal standards.

Keep Precise Records

Detailed records of employee work hours, especially for off-site and irregular work hours, are invaluable in defense against claims of unpaid overtime.

Consult Legal Counsel When in Doubt

When faced with unique employment situations, legal advice can be your best ally. Don’t hesitate to consult with a labor attorney if you’re unsure about how to handle a particular employee compensation matter.

Ready to Ensure Fair Compensation? Act Today

While it’s a complex web of laws and regulations, understanding when you must pay employees, even when they’re not working, is a critically important task for any business. Failing to compensate employees properly can not only lead to legal trouble but can also tarnish your company’s reputation and employee morale.

Does your business have solid policies in place for unique employee work situations? Have you encountered any gray areas in employee compensation laws? It’s time to take action and ensure your payment practices are aligned with the law.

To gain a deeper insight and guarantee that your compensation strategies are both competitive and compliant, we recommend downloading 2024 DAVIS Salary Guide.

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