Most states, including Ohio, participate in Daylight Savings Time. This means that each Spring (in 2015 it will be on Sunday, March 8) and we spring forward and push the clocks forward one hour at 2:00 a.m. Daylight Savings Time runs from the second Sunday of March to the first Sunday of November.
This year, Daylight Savings Time ends on Sunday, November 2, 2014 and we fall back and push the clocks back on hour at 2:00 a.m. This means that hourly (non-exempt) employees who are at work at 2:00 a.m. when the clocks are pushed back typically will work an extra hour that day/week and must be paid for it, including overtime if the extra hour pushes or contributes to the employee’s workweek hours exceeding forty.
So, what does this mean for employers? Well, the key concern for employers is how the change impacts hourly (non-exempt) employees who work during the time change, e.g., the graveyard shift?
The rule of thumb is easy: Employers are only required to pay hourly (non-exempt) employee for hours actually worked. Of course, this rule can be modified by an employer policy, employment agreement or collective bargaining agreement.
As you know, the Fair Labor Standards Act (FLSA) requires employers to credit and pay employees for all hours worked. For an employee who is on duty at 2:00 a.m. when Daylight Savings Time starts and the clocks are moved up an hour, this typically means the employee will work one hour less that shift/week. Although an employer may choose to pay the employee for the normal number of hours in the employee’s shift, this is not required. If an employer does choose to pay the employee for this extra hour, even though it was not worked, the employer does not have to include the extra hour in the employee’s regular rate for calculating overtime. This is pursuant to 29 U.S.C. § 207(e)(6) which excludes certain payments from the definition of “regular rate.” This extra hour of payment is also not considered a “premium” payment, so an employer cannot receive a credit to use toward overtime compensation under 29 U.S.C. § 207(h)(2).
Here is how this works in application:
Springing Forward: An hourly (non-exempt) employee works the graveyard shift when Daylight Savings Time starts this Sunday. The employee is scheduled to work 12:00 a.m. to 8:00 a.m., but because of the time change, the employee does not actually work the hour from 2:00 a.m. to 3:00 a.m. Since the employee only worked seven hours that day, the employer is only required to pay the employee for the seven hours actually worked unless there is a policy or agreement providing otherwise.
Falling Back: An hourly (non-exempt) employee works the graveyard shift when Daylight Savings Time ends on Sunday, November 2, 2014. The employee is scheduled to work 12:00 a.m. to 8:00 a.m., but because of the time change actually works the hour from 1:00 a.m. to 2:00 a.m. twice because at 2:00 a.m. all of the clocks are turned back to 1:00 a.m. In this scenario, the employer is required to pay the employee for nine hours, even though the employee’s schedule only reflects eight hours. In addition, in states where employers must pay overtime for hours in a day worked over eight, which does not include Ohio, the employer would have to provide overtime payment on this extra hour.