Not a Member? Get access to HR news and resources that you can trust.
Here is how HR can help prevent the missteps that could cost your company big in court.
Is your employee handbook ready for the changing world of work? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
60+ new SHRM Seminar dates in 10 U.S. cities and virtually.
Expand your influence and learn how to become an effective leader -- Join us in Phoenix, AZ, October 2-4, 2017.
Reclassified workers might be tempted to underreport hours worked
Faced with the competing pressures of getting work done and managing labor costs, individual managers might encourage newly reclassified nonexempt employees to not report all of their work hours, even if corporate policy and the law say otherwise, said Brett Coburn, an attorney with Alston & Bird in Atlanta.
And even if rogue managers aren't to blame for off-the-clock work, reclassified employees who are told they must complete their work within certain time periods, such as 40 hours in a week, might be tempted to not report all hours worked to avoid discipline for being inefficient.
For more overtime compliance news, tips and tools, check out the SHRM resources provided below:
Formerly exempt employees reclassified as nonexempt because of
the overtime rule will undergo "a significant culture shift," Coburn said. "Both the employees and their managers will be used to working as many hours as it takes to get the job done, without regard to how additional work might impact compensation or labor costs."
Reclassified employees will have to adjust to punching a clock and paying attention to their hours each day. Their managers will have to "play a much more active role in managing employee schedules," he noted," to make sure that all of the work gets done in a cost-effective way and within budget."
Newly reclassified employees often bristle at the possibility of being disciplined if they don't complete the same amount of work in a shorter period of time.
While employees ultimately may be held accountable for not completing assigned work by a specified time, "employers must also be realistic in their expectations about how long certain work should take," said Jim Swartz, an attorney with Polsinelli in Atlanta. "Employers that grossly underestimate the time it takes to complete work run the risk of inadvertently encouraging off-the-clock work or harming employee morale."
As for employees, he added, "often the greatest challenge of a reclassification is changing the mindset and practices of employees who are used to doing their jobs without worrying about tracking their working time."
Workload vs. Performance Issue
The inability to complete all work within a timeframe is an issue employees should discuss with management, said Catherine Wells, an attorney with Chiesa, Shahinian & Giantomasi PC in West Orange, N.J. The employer may have delegated too much work or an employee may not be up to the task of performing the work in that timeframe. "Each situation has to be analyzed on a case-by-case basis to determine whether it is a performance issue or a workload issue," she said.
Newly nonexempt employees chafe at being treated as hourly employees and perhaps are not accustomed to being judged based on their efficiency in how they get their jobs done, noted Paul DeCamp, an attorney with Jackson Lewis in Reston, Va., and former administrator of the Wage and Hour Division.
"For those employees, especially the ones who find themselves less able to get the work completed in the amount of time the employer designates for the work, there may be a perception that it is better for them to work off the clock than to be revealed to be a poor performer now that time has become a relevant metric," he noted. If the relationship with those employees ultimately sours, they may turn around and assert a Fair Labor Standards Act claim for off-the-clock work.
"Underreporting hours worked is a method of falsely claiming to be more efficient in one's work than one really is," DeCamp said. "and employees have no right to be untruthful about job performance."
The risk of off-the-clock claims is greater than it was 10 years ago, according to Clyde Jacob, an attorney with Coats Rose PC in New Orleans. "The DOL's enforcement activity and the plaintiffs' bar legal actions are more prolific than ever," he said.
Employers can take steps to minimize their exposure to off-the-clock claims:
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Don’t Lose Sight! What Does Poor Preventive Care Cost Your Business?
Join SHRM's exclusive peer-to-peer social network
SHRM’s HR Vendor Directory contains over 3,200 companies