At a Premium: Paying Employees NOT to Work

January 29, 2016 2:40 am
As managers and HR professionals, we know that accurately tracking and paying employees’ hours worked can be tricky. The matter becomes even more challenging when you consider certain types of premium pay that may be due to employees when they are not working. Reporting Time: If an employee reports to work and is furnished with less than a full day’s shift, the organization must pay the employee for half of the regularly scheduled hours, with a minimum of two hours’ pay, but not more than four hours’ pay. If an employee is required to report back to work a second time in the same day, he/she must receive at least two hours’ pay. There are exceptions to this rule including when work is interrupted by an act of God, public utility failure, or threats to the organization. Reporting time also applies if an employee is terminated without notice and is provided with less than half of the usually scheduled shift on the final day. Split-Shift Pay: A split shift occurs when an employee is scheduled for two distinct work times in one day, such as 7:00am to 10:00am, and then again from 1:00pm to 5:00pm. When there is an unpaid interruption of more than one hour, the employee must be paid an additional premium hour at minimum wage. However, the premium pay is not required if the employee’s pay for hours worked equals at least minimum wage plus the additional hour. For example, an employee earning $9.00 per hour would earn $72 for eight hours worked. With a split-shift premium of one hour, total pay for the day would increase to $81. If the employee’s hourly rate were $10.50, s/he would earn $84 for his/her work hours, and no additional premium would be due. These types of premium pay are not considered hours worked, and do not count toward calculations for overtime or vacation accrual. Failure to provide premium payments could lead to a claim for waiting time penalties and attorney’s fees, so it is important to understand when they are triggered and how much is due. Finally, be sure to stay in compliance with Labor Code section 226 by separating actual hours worked from any premium hours on employees’ paycheck stubs.
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