It seems like it would be straight forward but in the real-world of employment there are some quirky circumstances! It can be confusing and you may end up unsure if you need to pay an employee or not. Learn the rules behind what the law considers Paid Time.
Under federal and state rules, ‘hours worked’ includes both time worked and time of authorized attendance. This means that you must pay for anytime an employee performs work, whether the work was authorized or not. This includes work performed away form the job site or even at home.
The law has defined “employed” to be anytime an employee is “suffered or permitted to work.” Work time is all time an employee is required to be on the employer´s premises, on duty, or at a prescribed work place. It includes all time spent performing a principal job activity or performing an activity preparing an employee for work. This area of law is complex. For clarification, we’ve included some commonly asked questions and their answers at the bottom of this article.In order to avoid liability for payment it is management´s duty to have and enforce rules prohibiting unauthorized work. If a worker insists on not following your work rules, discipline would be in order. However, you must pay for all hours worked, even if unauthorized.
Wage and hour law distinguishes between two types of waiting time: being engaged to wait and waiting to be engaged.
Time spent engaged to wait is compensable hours worked. Where waiting is an integral part of the job, i.e., when the time spent waiting belongs to and is controlled by the employer and the employee is unable to use the time effectively for his or her own purposes, the employee is engaged to wait and such time is considered as part of hours worked.
Time spent ‘waiting to be engaged’ is not compensable hours worked. Periods during which an employee is completely relieved from duty and which are long enough to enable the employee to use the time effectively for the employee’s own purposes are not hours worked.
An employee is not completely relieved form duty, however, and may not use the time effectively for his or her own purposes unless the employees is told in advance that he or she may leave the job and that he or she will not have to commence work until a specified hour has arrived.
Show up Pay or Adequate Work.
Employers must pay minor employees (under the age of 18) for one hour of work or half of the scheduled shift, whichever is greater.
The Oregon rule requiring “show-up pay” or “adequate work” for adult workers was rescinded in 1990. This rule required employers to guarantee work and/or payment of at least half the scheduled shift. Under current wage and hour laws, when an adult employee reports for a scheduled shift but is sent home early for lack of work, the employer need only pay for the actual time worked. If the employee performs no work and is not required to wait on the employer´s premises for any period of time, no wages are due.
So if you have an employee show up for work, and wait in the break room for 15 minutes while determining if they have work for them to do that day. Then they send him home.
The company is legally required to pay that employee only for the 15 minutes of waiting time in the break room. According to federal and state wage laws, that time is compensable because that employee was “engaged to wait” on premises. On the other hand, there is no legal obligation to compensate that employee for any other portion of the scheduled shift, unless the company has promised such compensation in its policies or under a wage agreement with the employee.
But if you have a 15-year-old employee that was scheduled to work a 4 hour shift from 10:00 a.m. to 2:00 p.m. that was sent him home immediately after they showed up for their shift because of the lack of work available. Does this employee need to be paid for any part of the scheduled shift even though there was no work performed?
The answer is Yes. There is an “adequate work” rule which remains in effect for minors (employees younger than 18). OAR 839-021-0087(5) states that a minor who is required to report to work must be provided sufficient work to earn at least one-half of the amount earned during the minor´s regularly scheduled shift or be paid reasonable compensation if the work is not provided. Reasonable compensation means the greater of: (a) the amount the minor receives for one hour of work at his/her regular rate of pay; or (b) the amount determined by multiplying the minor´s regular rate of pay by one-half of the hours the minor was scheduled to work.
So the 15 year old employee must be paid for one-half of the regularly scheduled shift, which in this case would amount to two hours at his regular hourly rate.
An employee who is required to remain on-call on the employer’s premises or so close thereto that the employee may not use the time effectively for the employee’s own purposes is working while ‘on-call’ and must be paid for such time. An example would be a fireman waiting to respond to an emergency.
An employee who is not required to remain on the employer’s premises, but is merely required to leave word where he or she may be reached, need not be paid for being ‘on-call.’ For example, if you require an employee to carry a beeper or leave a number where he/she can be reached in case of emergency during specified hours. The employee is able to use the time effectively for his/her own purposes, even though there is a slight limitation. Payment must be made for only the time the employee is called upon to perform work.
In general, training or meeting time must be counted as hours worked when an employer requires an employee’s attendance.
When specialized or follow up training is required by any law or ordinance for certification of employees and the training takes place outside of the employee’s regular working hours, employers are not required to pay employees for the training time.
Commonly asked Quirky Work Time Questions
Q. If I require an employee to report anytime before a scheduled shift in order to facilitate a smooth transition, do I have to pay for the time?
A. Yes. In this case the requirement to report to work on your premises would serve a clear business purpose as it would benefit you as an employer and would be necessary for the smooth operation of the business.
Q. I ask my employees to be at their work station to be ready to perform their jobs at a prescribed time. In order to do this they must perform certain activities to enable them to be ready to begin work. Do I have to pay them for the time spent in preparation?
A. Yes, if the prep time is an integral part of their principle work activity, and the job could not be accomplished without these preliminary activities. Some examples of preparatory activities are:
- A waitress setting up a work station, i.e., preparing coffee, filling condiment jars, etc.
- A machinist cleaning and oiling the machinery in a plant prior to beginning a shift.
- A bank teller counting a till before the business opens to the public.
Q. I require my employees to wear uniforms on the job and some of them, for their own convenience, prefer to keep the uniforms at my place of business and change for work on the premises. Do I have to include this time when computing hours of work?
A. No. There is no need to compensate for activities performed for the employee´s convenience.
Q. I have certain employees that arrive early and/or stay late due to transportation problems. They insist on working as they do not like to remain idle and claim they will volunteer the time. Am I liable for payment even though they are volunteering the time?
A. Yes. The law states that an employer must compensate an employee for all hours worked whether those hours are authorized or unauthorized.
Q. I´m in a business which requires me to ask a certain number of employees to report to work, but the number I require to actually perform work depends on the business that day. If I ask the employees to wait on the premises until I can be sure of the work availability, do I have to pay them for the time?
A. Yes. The law requires that time spent waiting to perform work for the benefit, and at the request of the employer, be paid.
Q. If I send workers out on a job and they have to wait for a customer or equipment to arrive, do I have to pay them for the time spent waiting?
A. Yes, unless you specifically relieve the employee from duty, and the time period is sufficiently long enough for the employee to use the time for his or her own purposes. For example, a trucker waiting six hours to pick up a load has sufficient time, but a stenographer waiting 15 minutes for dictation does not. If a regular part of a person´s duties concerns waiting, that time will always be considered work time.
Q. When an employee needs on-the-job training, can the employer establish a “training period” during which it would not be necessary to pay the minimum wage and overtime?
A. No. The law does not recognize unpaid on-the-job training time. “Training time” is considered a cost of doing business for an employer.
Q. If I require my employees to attend monthly staff meetings outside regular work hours, do I have to pay them for the time spent in the meeting?
A. Yes. Anytime an employer requires an employee´s attendance that time must be considered as hours worked, even though the employee may not be engaged in a productive work activity. This includes safety meetings.
Q. If I require an employee to attend a company-paid class or seminar to improve job performance, do I also have to pay the employee for hours spent in class?
A. Yes. If you require attendance, you must pay the employee for hours spent in class.
Q. When would I not have to pay for such training time?
A. An employer does not have to pay for time spent in lectures, meetings or training programs if the following four criteria are met:
- Attendance is on employee´s own initiative (voluntary in nature).
- Attendance takes place outside an employee´s regular work hours.
- The training provided is not directly related to an employee´s current job.
- An employee does not perform any productive work during the course of the training.
- The Federal law recognizes special exceptions in which the criteria listed in the previous question would not have to be met. For example, an employer-established program of instruction that corresponds with a program offered by an accredited institution of higher learning, such as a community college would qualify as an exception. Voluntary attendance by the employee, outside of working hours need not be compensated as hours worked.
Q. If I hire an apprentice, do I have to pay for hours that the employee is required to spend in class under the apprenticeship agreement or program?
A. No. Time spent in classes of supplemental instruction required under a “bona fide apprenticeship agreement” is not considered compensable time if no productive work time is performed by the apprentice.
A bona fide program is one that is recognized by and meets the standards of the Bureau of Apprenticeship and Training of the U.S. Department of Labor in conjunction with the Apprenticeship and Training Division of the Oregon Bureau of Labor and Industries
An employer may not accept the benefit of an employee’s work without compensating the employee. It is the employer’s duty to ensure that work is not performed if the employer does not want such work performed. Just simply having a rule or policy prohibiting unauthorized work is not enough. The employer must enforce the rule, including disciplining employees who violate the employer’s policy regarding work time.