Payroll in Practice: 2.22.21

Feb. 22, 2021, 5:37 PM

Practitioners’ questions are answered by a payroll and tax consultant who also is an enrolled agent licensed to practice before the Internal Revenue Service.

Question: We are a health-care facility that is developing procedures to ensure adequate staffing during emergencies. We would like to have staff members arrive before regular shifts or stay over between shifts. We plan to offer the regular rate of pay for the hours they are on-site. In such cases, do we have to count rest time as hours worked for overtime purposes?

Answer: Counting rest time as work time depends on circumstances and state laws, which may vary from federal regulations. For employees on duty for less than 24 hours, federal rules require that all hours count as hours worked even if the workers are allowed to sleep or engage in personal tasks during periods of inactivity.

However, when employees are on duty for more than 24 hours, the employer and employees may agree to exclude from hours worked up to eight hours for meals and sleep. The employer must provide adequate sleeping facilities and conditions that allow employees an uninterrupted period of sleep.

From an administrative standpoint, the employee should be able to obtain at least five hours of sleep during the rest period. If there is an interruption during that time, the interruption time must be counted as hours worked.

When the interruptions are such that the employee cannot get a reasonable night’s sleep, the entire rest period counts as hours worked.

For planning purposes, there must be an agreement to exclude rest hours and the employees have to be on-site for more than 24 hours. Otherwise, the entire time is considered hours worked for overtime purposes.

With respect to the proposed plan, it sounds as if the employees are to be paid for all hours spend on the work site. When that includes rest hours that are not counted as work hours, the payment for rest hours that are not worked does not make them hours worked for purposes of determining overtime compensation. In that situation, the pay for hours not worked also may not be applied toward satisfying the employer’s overtime compensation obligation.

By Patrick Haggerty

Do you have a question for Payroll in Practice? Send it to phaggerty@prodigy.net.

To contact the reporter on this story: Patrick Haggerty at phaggerty@prodigy.net
To contact the editor on this story: Michael Trimarchi in Washington at mtrimarchi@bloombergindustry.com

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