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November 03, 2016
Beware Daylight Saving Compensation Pitfalls

When we turn our clocks back this weekend, employers need to be aware of the effect that the end of daylight saving time (DST) has on payroll.
For states and municipalities participating in DST, the change happens at 2 a.m. on Sunday, November 6. Many of us will get an extra hour of sleep that night, but for employees working the graveyard shift, it means they work an extra hour.

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Daylight savingsRegardless of what the clock says, the Fair Labor Standards Act requires that nonexempt employees be paid for all hours worked. So if an employee works from 11 p.m. on Saturday to 7 a.m. on Sunday, she must be paid for 9 hours of work that day and that hour must be included when determining whether overtime pay is due that week.

And in states where employees must be paid overtime for hours worked beyond 8 in a day, the employee may be owed time-and-a-half for the ninth hour, depending on whether you define a “workday” by shift or by the calendar. (According to the U.S. Department of Labor, Alaska, California, Nevada, Puerto Rico, and the Virgin Islands require that employees be paid overtime when they work more than 8 hours in a day. The last two, however, don’t observe DST. In Colorado, premium pay starts after 12 hours. Oregon and Rhode Island also have some daily overtime requirements but they only apply to certain industries.)

Of course, the reverse is true when we turn our clocks forward in March. The employee working the night shift will work only 7 hours and needs only be paid for that time.

If, in March, an employer opts to pay the employee for 8 hours of work anyway, that hour of pay does not need to be included in any overtime calculations, but you also can’t use it to offset any overtime pay due that week (29 U.S.C. §207(h)).

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