What’s the Story on Timesheets?

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by Larry Levy, Employee Relations Management, H.R. Alert May 2011

The following e-mail was sent to me last month by a contractor client:

“A recent situation of ours has a tie–in to your (April) H.R. Alert.  We were reclassified by our Workers’ Compensation carrier to the higher cost category, because the auditor claimed that we failed to include the start and stop times on our time cards.  The added cost for the re-classification was $13,600, and that’s just for two employees. Employers have been told to include the start and stop times, but I’m sure that many do not take it seriously.  We are presently fighting over this issue with the insurance company and the outcome is still in doubt”.

It is your legal obligation to record the actual hours of work for all your non-exempt workers.  Non-exempt workers are those hourly workers whose compensation is based upon the actual hours of work and provide your direct services or products to your customers or clients, i.e., carpenters, electricians, bookkeepers, marina workers, plumbers, office workers, dental assistants, plumbers, painters, landscapers, restaurant personnel, etc.

Although time clocks are not required by the Fair Labor Standards Act you are required to record all the actual hours of work in ink or some other indelible form.  This means you may use a weekly or bi-weekly timesheet, time card or electronic time card.  The Fair Labor Standards Act is a large book that covers all the federal wage and hour laws for every employer in the country.  Furthermore, California has its own wage and hour laws documented in separate wage orders for each specific industry, i.e. Wage Order 16 is for construction, etc.  We’re not through.  There are even municipalities or cities that have their own wage laws like San Francisco that has its own minimum or “living” wage.  On top of this, you have “prevailing wages” for public projects and wages negotiated in union collective bargaining agreements.  It can be a real challenge to figure out what wage laws you are subject to!

For each work day for your non-exempt workers you must record on the time sheet the following:

  • Actual arrival time and the commencement of work;
  • The actual time a worker started or departed for the meal period;
  • The actual time a worker returns from the meal break; and
  • The actual time the worker ceases working and departs for the rest of the day.

I cannot stress enough the importance of recording these four actual times each day for each of your non-exempt workers.  I have accompanied many employers to a conference with the Labor Commissioner  where the employer’s defense of writing down an eight hour shift for each day’s work did not cut it.

In computing the hours of work the employer may “round-off” the employee’s starting and stopping time to the nearest five minutes or 10th of an hour as long as the practice averages out over time.

What happens when a worker clocks in but does not work?  Do you have to pay them for standing around?  No, you do not have to pay them for this time provided you can be assured they were not working.  It is your obligation to ensure your workers do not clock-in early.

Similarly, be rigorous in monitoring employees who clock-in for a co-worker or forget to clock-in after they started work.  In this case have the employee write a note on his/her time card identifying the error and writing the actual time she/he started work.

What about stating that a worker worked an eight hour shift on certain workdays.  I am sorry but that won’t work.  You must record that actual hours worked (work and meals) for each work day.

Can you use an electronic time-keeping system linked to your computer?  Yes, you may as long as the information is accurate and you can procure a hard copy off your printer.

Please ensure that every time card is signed by the employee in indelible ink following the statement: “I hereby verify that these hours of work on my time-card accurately reflect that actual hours I worked”.  It is also smart to have a space on the time-card for the supervisor’s signature.

Regardless of the method used any time spent by your employee on “call-backs” is considered time worked and must be recorded on the time card.  The amount of pay may vary as long as the amount is over the minimum wage.

***

Larry Levy, www.employeerelationsmanagement.com, can be reached at (415) 892-1497.

 

 

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