Be Sure to Pay for Extra Hour of Work When Clocks Fall Back

​Daylight saving time ends at 2 a.m. local time Nov. 5, and clocks will fall back one hour. This time shift may affect employers' obligations under minimum wage, overtime, and meal and rest break laws.

For example, if a nonexempt employee is working an eight-hour shift when the clocks turn back an hour, the employer must pay their regular wage for that extra hour of work and may need to pay overtime for that extra hour, depending on state law. Minimum wage laws apply to any hours worked.

"Employers must check the state laws applicable to where their employees work because some state wage laws require the state's overtime rate to be paid if a nonexempt employee works more than eight hours in a workday. In each case, if the state's minimum wage is higher than the federal minimum wage, the higher rate of pay applies," said Robert Small, an attorney with Reger Rizzo & Darnall in Philadelphia.

Federal law requires overtime pay only for nonexempt employees when they work more than 40 hours in one workweek.

Some states, including California, require meal and rest breaks after someone works a certain amount of hours. Adding an hour to an employee's shift may impact the required meal and rest breaks.

One solution is to have the worker leave an hour earlier on the day when the clocks turn back.

"Under the Fair Labor Standards Act and state law analogues, employers are obligated to pay nonexempt employees at least the federal minimum wage for every hour worked, but only for hours actually worked," Small said.

The time shift is most likely to impact employers that normally have 24-hour operations, such as hospitals, hotels, fire departments and police departments. Airlines, railroads, bus companies, convenience stores, gas stations and call centers sometimes are open overnight, as well.

"Employers should identify those workers who will be working the shift when clocks are moved back and alert their payroll department to be sure those workers are compensated for the extra hour they will work that day, and make sure that the extra hour is counted toward any overtime pay that is due," Small said. "If the employer uses a payroll service, it should identify the affected employees to the service in advance of the day on which payroll is made, so that the service can act accordingly. Employers also might want to inform affected employees, either in advance or at the time wages are paid for that shift, why their pay will be different for that payroll period."

If employers have nonexempt employees working at 2 a.m. or soon thereafter on Nov. 5, "then they should confirm that their timekeeping systems are designed to capture the extra hour that those employees will end up working that night," said Elizabeth Wells Scaggs, an attorney with Varnum in Grand Rapids, Mich. "Employers should be proactive ahead of time to ensure this doesn't become an issue later."

Certain automated timekeeping and payroll systems can automatically adjust hours for the time change, said Angela Cronk, an attorney with Goldberg Segalla in Philadelphia.

"It is imperative for employers and HR representatives to validate employee schedules and make sure that all employees are credited and compensated for all of the hours worked, even if affected by the time changes," she said.

Note, too, that not all states observe daylight saving time. Those that do not will not be affected by the time change.