This Sunday was Daylight Savings Time and we pushed the clocks ahead by one hour. This is, on a human level, a welcome event, as it signals winter’s end. Now, I can fling away any vestiges of Seasonal Affective Disorder and turn my attention to outdoor activities. Employers, however, must be vigilant on the particular day that this event takes place, as there is a FLSA implication to it.
The US Department of Labor has issued an Opinion Letter in 1967, but it remains the USDOL position, addressing the issue of whether overtime is due when employees work the shift during which the clock changes from 2AM to 3AM. Ostensibly, this adds on an extra hour to the shift, making an eight hour shift a nine hour shift, but the employee is actually working only seven hours not eight. There also is the issue of whether the payment for the extra hour must be included when computing the regular rate for purposes of overtime calculation.
The DOL opined that the payment of the additional hour’s pay to the employee who works the seven-hour shift at the beginning of the change to daylight saving time need not be included in the regular rate of pay in accordance with Section 7(e)(2) of the FLSA. Since this extra compensation is not being given for actual work performed, the payment was not made as compensation for the employee’s hours worked in the workweek and thus it need not be included when the rate for overtime is computed. Conversely, no part of such payment could be credited toward overtime compensation due, if the aggregate hours worked during the week equal or exceed forty hours. The key point is that the worker is only working seven hours in the spring-forward scenario.
However, the Opinion Letter also warns that, at the end of the daylight saving period, the employee working the nine hour shift must receive pay for the nine hours and all such time must be counted in determining the hours worked in that workweek.
This is the kind of hidden landmine that employers may stumble on and not pay people correctly, either overpaying them or underpaying them. It is indicative of the many nuances in FLSA law that employers need to look to counsel for guidance.
Enjoy the additional sunshine!