4 Wage and Hour Problems as Daylight Saving Time Ends

As most of us prepare to set our clocks back one hour this weekend, here are a few wage and hour considerations for employers.

1. Does Double Pay Apply for 1 a.m. to 2 a.m.?

Employers whose nonexempt employees are in the midst of a shift at 2 a.m. on Nov. 6, when that time becomes 1 a.m., may be required to pay these employees for one additional hour of work—if, in fact, the time change extends the number of hours actually worked. This is because federal law requires employers to pay employees for all hours worked, and these employees will have essentially worked the hour from 1 a.m. to 2 a.m. twice (and that “extra” hour will carry over throughout the remainder of the shift). To avoid this, employers could alter the start or end times of these nonexempt employees’ shifts on Nov. 6.

2. Employers’ Overtime Obligations

If an employer in the above scenario does pay its nonexempt employees for an additional hour of work, it might be on the hook for overtime compensation as well. That is, the hour from 1 a.m. to 2 a.m. that equals two hours of work might result in a workweek of over 40 hours or a workday in excess of 8 hours. Employers may need to consider that additional hour of work in determining employees’ overtime compensation for the day and week.

3. Regular Rate of Pay

The Fair Labor Standards Act (FLSA) requires employers to pay employees one-and-one-half times their regular rate of pay for all overtime hours worked. For some employees—those paid on commission, tipped workers, and employees who receive bonuses, to name a few—this regular rate is a bit more difficult to determine. Under federal law, an employee’s regular rate of pay is the employee’s hourly rate for all of his or her nonovertime hours worked in a single workweek.

When calculating an employee’s regular rate, employers must consider all compensation that the employee received in one workweek, including the additional hour of compensation to which a nonexempt employee may be entitled if he or she is working during the time change. Thus, employers that have workers on the clock at 2 a.m. might need to take this into account when computing employees’ regular rate of pay for the week for purposes of calculating an employees’ overtime rate.

4. What About the Beginning of Daylight Saving Time?

Forward-thinking employers may also want to take the start of daylight saving time into account. Nonexempt employees who are working on Sunday, March 12, 2023, at 2 a.m.—when clocks will “spring forward” to 3 a.m.—may be entitled to one fewer hour of pay for their shifts because, essentially, they would not have worked from 2 a.m. to 3 a.m. For example, if an employee is scheduled to work a shift from 11 p.m. to 7:30 a.m. with a half-hour break, he or she will have worked only seven hours. Once again, employers may adjust their nonexempt employees’ schedules for that day to give them an additional hour of work.

Note, however, that the FLSA does not require employers that decide to pay a worker for a full eight-hour shift even if he or she worked only seven hours to include that extra hour of pay in calculating the employee’s regular rate of pay for overtime purposes. The FLSA also prohibits employers from crediting that extra “nonworked” hour of pay toward any overtime compensation due to the employee.

As in every situation, employers will want to take into account any additional obligations under a collective bargaining agreement or state law.

States that Deviate from the Daylight Saving Standard 

Note that Arizona (with the exception of the Navajo Nation) and Hawaii do not observe daylight saving time.

Eighteen states have enacted legislation or passed resolutions to provide for year-round daylight saving time, if Congress were to allow such a change. Will that eventually happen? Only time will tell.