On November 6, 2011 at 2:00 a.m. daylight savings time will end and most clocks across the country should be set back an hour from 2:00 a.m. to 1:00 a.m.  Non-exempt employees working a shift during that time must be provided with an additional hour of pay.  For example, if an employee’s shift runs from 10:00 p.m. to 6:00 a.m., the employee will receive nine hours of pay instead of eight hours of pay because he or she will have worked the 1:00 a.m. hour twice.  In calculating any overtime due, employers must count this additional hour in determining whether the employee crossed the 40-hour threshold and must also include the additional hour of pay in calculating the employee’s overtime rate.

The reverse will be the case next spring, when daylight savings time begins again and the clocks are set forward from 2:00 a.m. to 3:00 a.m.  Then, an employee who works the overnight shift will be entitled to pay for only seven hours rather than eight hours, because there will be no 2:00 a.m. hour to work.  Employers will certainly be free, however, to pay employees the additional hour of pay (or, they may be required to do so pursuant to a collective bargaining or other agreement).  Nevertheless, in calculating any overtime due, this additional hour need not be counted in determining whether the employee crossed the 40-hour threshold and should not be included in calculating the employee’s overtime rate. Further, employers may not credit this additional hour of pay towards any overtime compensation actually due to the employee for the week.  

This issue affects all employees, except those working in Arizona and Hawaii – the two states that do not observe daylights savings time.