If your business doesn’t operate 24/7, you probably shut down just about everything at some point during the night. That’s especially common with retail operations.
If that shutdown includes resetting the time clocks to automatically clock out everyone, you may be courting a lawsuit. That’s because if employees sometimes work later than the automatic reset, they won’t get paid for every minute worked. That violates the Fair Labor Standards Act.
A better approach: Make it standard practice for a manager to verify that everyone is out of the building and clocked out before leaving for the night.
Recent case: Marcus and several other workers at a Chipotle restaurant sued over unpaid wages, including alleged unpaid overtime. They claimed that a nationwide company policy encouraged off-the-clock work by tying managers’ bonuses to meeting targets for the number of hours employees worked. They argued that some managers told employees to clock out but keep working. They also said that the company’s time clocks automatically reset at 12:30 a.m., essentially clocking out anyone who was still working.
The court wouldn’t allow the nationwide off-the-clock policy claim, but did give the go-ahead for the automatic time clock reset collective action. The restaurant will now have to defend claims that employees worked past their automatic clock out. (Harris v. Chipotle Mexican Grill, No. 13-CV-1719, DC MN, 2014)
Final note: Don’t forget that the Department of Labor now offers a free smartphone app to help employees track their hours and compare their paycheck figures to what the app says they are owed. It automatically calculates what the regular and overtime figures should be after employees start and stop the app as they work.