Outten & Golden: Empowering Employees in the Workplace

When Workers Don’t Get Paid: 3 Contributors to Wage Theft

July 9th, 2018 | Danielle Higley

Wage theft, sometimes known as time theft against employees, has been in the news a lot lately. That’s due to a study by the Economic Policy Institute (EPI) and another by Elizabeth Tippett of the University of Oregon, featured on NPR’s Planet Money podcast.

Recently, TSheets, a time tracking software company, ran a survey of their own. Their survey found just under 10 percent of employers admit to taking time off employee timesheets every day. Over 60 percent of those take off 30 minutes per day or more. Applied to the broader, hourly workforce across the U.S., TSheets estimates workers are losing out on $22 billion in earnings each year. Here are three known factors contributing to those billions lost.

Wage theft contributor 1: Unpaid breaks

The government has some stipulations in place when it comes to breaks for meals, namely “The employee must be fully relieved from duty for the purposes of eating regular meals.”

The trouble is, some employees, particularly those in the healthcare or education sector, aren’t often able to walk away from their work completely. They end up working straight through their lunch, even while clocked out. For them, it’s tough to take time off when part of their performance, and potentially their compensation, is based on their responsiveness.

The best solution — both from an employee perspective and from employers who want to avoid an expensive FLSA lawsuit — is to figure out how to accommodate employee breaks, so individuals are free to take advantage of that time of rest. At the very least, employers should be talking to employees and getting their input on how to improve the situation.

Wage theft contributor 2: Timesheet rounding

Timesheet rounding is a setting in time tracking software that rounds an employee’s time when they clock in or out to the nearest minute, five minutes, or 15 minutes. It’s common for an admin to set up rounding to the nearest minute, as payroll solutions like QuickBooks aren’t set up to process seconds.

But whether a company rounds to the nearest minute or the nearest 15 minutes isn’t the problem. It’s the direction in which the rounding occurs. Say an employer has set timesheet rounding to go up to the nearest five minutes when an employee clocks in, but down to the nearest five minutes when an employee clocks out. When the employee comes in at 8:31, the timesheet shows 8:35. When they clock out at 5:04, the timesheet shows 5:00. That employee has missed out on 8 minutes of paid time.

This problem becomes all the more challenging when the time tracker is set to round to the nearest 15 minutes. On this matter, the U.S. Department of Labor states employers cannot always round down. “Employee time from one to seven minutes may be rounded down, and thus not counted as hours worked, but employee time from eight to 14 minutes must be rounded up and counted as a quarter hour of work time. See Regulations 29 CFR 785.48(b).”

Wage theft contributor 3: Unpaid overtime

Did you know it’s illegal to withhold wages, even when those wages include overtime an employee has worked without consent or prior approval from a manager? The Department of Labor makes it very clear that “work not requested, but suffered or permitted is work time.” That means it doesn’t matter if the employee worked when they weren’t supposed to — they must be paid for the time they put in.

Many employers are also unaware that some travel time is considered eligible for overtime pay. For instance, while the time spent commuting from work to home or vice versa shouldn’t be counted, the commute from home to a job in the case of an emergency could be. Travel made on behalf of work, in some instances, also has the potential to be counted as overtime.

Wage theft conclusions

Wage theft is a complicated issue, and it’s one that employees and the lawyers, HR personnel, and union reps who represent them should be educated on. If you suspect an employer is taking wages from employees, it’s a good idea to contact your state’s labor agency to learn more about wage theft claims in your state.

Next, employees should try to find out if their employer rounds timesheets (and in which direction), in addition to documenting all hours they’re supposed to be paid and comparing those times to the ones listed on their paystubs. If the numbers don’t line up, it might be time for a conversation.

Everyone deserves to be paid for the time they put in. When employers intentionally or unintentionally violate that right, it isn’t just morally reprehensible — it’s against the law.

About the Author: Danielle Higley is a copywriter for TSheets by QuickBooks, a time tracking and scheduling solution. She has a BA in English literature and has spent her career writing and editing marketing materials for small businesses. Last year, she started an editorial consulting company.

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