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Tick Tock: Keep An Eye On Your Time Clock

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Automated time-keeping systems are a lot less burdensome than their predecessors. For example, non-exempt employees no longer need to queue up to physically punch in and out at the beginning and end of a day, or when they take their meal breaks. Less burdensome, however, doesn't mean that these systems always work on autopilot. Just ask one Midwestern hospital system, which was tagged with having to pay $1.7 million in back overtime pay to 4,000 nurses because its automated time-keeping system deducted for meal periods during which they worked.


Breaking the link. Automated time-keeping systems that are linked to the company's main computer system prevent employees from logging onto the computer system and beginning work before they officially clock in. These systems capture employees' first key strokes as work, thus eliminating claims that employees worked before their official workdays begin, but they assume that the first thing employees do is computer-related, which may not always be the case. Only human intervention, a/k/a employees' managers, will be able to determine when employees' workdays really begin. Other pitfalls with automated time-keeping systems include the following.

  • Override options. Some integrated time-keeping systems give employees options for clocking in. What to avoid: employees overriding the system by getting their manager's approval to clock in before their shifts start.

  • Faulty linkage. Once employees clock in, a computer prompt reminds them not to begin working until their official clock-in time. Once clocked in, however, the main computer system allows them to begin work, even if their shifts haven't yet started.

  • Rounding errors. To correct for payroll systems that couldn't track all of employee's work times, you could round employees' work hours to, for example, the nearest five minutes, one-tenth of an hour, or quarter of an hour, provided employees were paid for all the hours they worked. The point of new time-keeping systems is that they're more accurate, so rounding may not be as necessary.

Real world interactions. Not paying nurses who work through their meal periods is a blatant violation of the Fair Labor Standards Act (FLSA). Auto deductions can also get you in trouble in the following areas:

  • employees' rest breaks, since rest breaks are considered working time under the FLSA;

  • employees' changing time, which is compensable if employees must wear unique protective gear; and

  • setup/clean up time, which is compensable if those activities are integral to employees' main activities.

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