How Does Daylight Savings Affect Overtime?

Plastic clockStraight time or overtime?  That can be the question as employers are getting ready to pay employees after the clocks were set forward one hour last weekend.

Every spring and fall Daylight Savings impacts hourly workers across the country.  When daylight savings time arrived, the clocks were moved forward one hour.  Employees who work overnight were on duty at that time.  These employees typically work an eight-hour shift, but with daylight savings, they actually lost an hour of pay.Some employers will pay the normal eight hours of pay for that shift as a matter of policy.  However, under the Fair Labor Standards Act, they are not required to include the additional hour of pay when calculating an employee’s regular rate for overtime.  For example, if someone actually works 40 hours in the week, the additional hour’s pay for that daylight-saving hour would be at straight time, not overtime.

Employers who choose to pay employees for the hour lost in the spring change for daylight savings time do not include the extra hour of pay when calculating the employee’s overtime hours. In other words, overtime is only calculated on actual hours worked. Thus an employee who works 41 hours of actual time is compensated on 40 hours of regular pay and one hour of overtime pay. The “bonus hour” that the employer voluntarily chooses to pay is separate from regular hours and overtime hours.

When returning to standard time on the first Sunday in November, clocks are moved back one hour.  Employees who work overnight will actually work an extra hour, for a total of nine hours of work.  Employees must be paid for all nine hours.  They are also entitled to overtime on the basis of all hours worked during the week, including the extra hour worked during the conversion to standard time.

Daylight savings is not observed in all states.  As a result, employers with employees in multiple states may have to include policies that are fair to all employees and not singularly benefit or penalize employees in different states.  States that do not observe Daylight Savings Time include Arizona and Hawaii.

Some states also have enacted overtime laws. Where an employee is subject to both the state and federal overtime laws, the employee is entitled to overtime according to the higher standard (i.e., the standard that will provide the higher rate of pay).

Overtime Laws in the States — provides a clickable map that informs what the overtime laws are in each state.

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