Can Your Employer Pay You Based on Your Schedule, Not Actual Hours Worked?

Photo Credit: UCLA Labor Center

Federal and state wage laws require employers to keep accurate records of hours worked: If an employee exceeds 40 hours of work in a week, she must be paid at time and a half.

American Airlines pays hourly employees based on their schedule, not their actual hours. Specifically (and now I quote a court ruling):

“American’s timekeeping system is programmed to calculate pay for employees only for the duration of their shifts, excluding an automatic deduction for a 30-minute meal break. If an employee clocks in before the employee’s shift begins or clocks out after the shift ends, the timekeeping system defaults 4 to assuming that the employee only worked during the shift, rather than working any extra time. American calls those pre- and post-shift clock-in time durations “grace periods.”

The grace periods allow employees to avoid having to clock in exactly when their shift begins or clock out exactly when their shift ends.

Similarly, the timekeeping system’s assumption that an employee takes a 30-minute meal break during a shift means that employees do not have to return to the time clock before and after each meal break.

If employees actually do perform work during grace periods or meal breaks, American’s policy requires them to identify for a supervisor the time they worked outside of their shift and ask for approval of that time as an “exception” to their ordinary work hours. Otherwise, they are not paid for the time worked outside of their shift.”

The employees who sued are claiming failure to pay overtime and for time actually worked.

They are fleet service employees (they handle cargo, assist with lavatory services, and help maneuver aircrafts in and around hangars), mechanics (they perform repairs and updates on airplanes), and passenger service agents (they check passengers in and manage boarding at the gates).

On Monday, the Third Circuit Court of Appeals ruled that this class of employees must be broken into more similar categories.

The case is a good reminder, however, that employers must pay of work performed before a shift and after a shift, if the work is “indispensable” to the primary functions of a job. If an employee must don special attire, or perform a safety check on equipment, or spend time logging in and out of a computer system that time is compensable.

It may not seem like much—maybe 6 minutes before a shift, and 6 minutes after a shift each day. Take those 12 minutes and multiply by five working days, and that an employee has actually worked 41 hours, not 40 hours. And if they are paid, say, $20 per hour, they are due $30 for each week that the employer “estimated” their pay (that's because the pre- and post-shift work added up to make the last hour worked an overtime hour). And if this process occurred for two years and the employee worked for 50 weeks each year, the employee is due 100 * $30, or $3,000 (plus attorney’s fees).
Thanks to Janet for the lead on this story!