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How Does Daylight Saving Time Impact Employee Pay?

Published on

March 21, 2023

Brandi Clymer

Daylight Saving Time (DST) can be a confusing time for both employers and employees, especially when it comes to calculating employee pay. With shifts that cross midnight and varying state laws, it's important for employers to understand the impact of DST on their employees' pay and ensure compliance with labor laws. In this guide, we will explore the different ways DST affects employee pay, provide tips for handling shifts that cross midnight, and discuss state laws and job duties that may impact pay.

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Spring and fall daylight savings (Daylight Savings) bring about different issues for employee shifts that continue past midnight. Note: Hawaii and Arizona do not participate in Daylight Savings.

In the fall, the employee works an extra hour because they work from 1-2 am twice since at 2 am, you fall back to 1 am. Since they work the extra hour, they should be paid per FLSA, which says non-exempt employees are to be paid for actual hours worked. For example, if the employee is scheduled to work from 11 pm to 7 am, they are typically paid 8 hours, but for Daylight Savings, they performed an extra hour, so they should be paid 9 hours. 

In the spring, the employee works an hour less since they are not working from 2 am to 3 am. Essentially the employee is working 1 hour less than usual.  For example, if the employee is scheduled to work from 11 pm to 7 am, they are typically paid 8 hours, but for Daylight Savings, they performed an hour less, so they should be paid 7 hours. Some employers will pay the employee for 8 hours in these instances.

Scissortail’s TLM module’s default behavior is to calculate hours based on hours worked. If you want to pay the employee an extra hour in the spring, you could handle it in two ways. 

  1. There is a step that can be added to the Pay Calculation to add an hour in the spring to the employee’s timesheet, or 
  2. You could manually adjust the Timesheet to add an extra hour. There is a similar rule that can be added in the fall to reduce the hours by 1 hour, but we do not recommend using this and instead pay for what the employee worked. To avoid FLSA issues, we recommend being consistent and erring on the employee’s side. 

Every situation and employer is different in how they handle Daylight Savings.  You should always consider state laws and labor agreements with collectively bargained employees.

Other things to consider about Daylight Savings

Work Shifts, Titles, and Daylight Savings Time

Daylight Saving Time (DST) impacts different employees in various ways, depending on their work schedule, job title and location. As a result, employers must consider these factors when evaluating how Daylight Savings will affect their employees and their pay.

For instance, employees working the day shift from 9 am to 5 pm, whether they are hourly or salary paid, will generally not experience any change in their work schedule due to Daylight Savings. However, this is not the case for employees working night shifts. When Daylight Savings begins, clocks are set ahead by an hour, meaning night shift workers have to work an hour less. Conversely, when Daylight Savings ends and clocks are set back an hour, night shift workers will work an additional hour.

Employers must be aware of the impact of Daylight Savings on each job title to determine accurate pay. For employees working hourly schedules, pay is usually adjusted to reflect the extra or missed hours of work. However, salaried employees' pay remains the same, as they are paid on an annual salary rather than an hourly rate. In such cases, employers may need to determine the hourly rate that the employee receives and make the necessary adjustments to reflect the extra or fewer hours of work.

The Sunshine Protection Act 

The Sunshine Protection Act is a proposed federal law that would make Daylight Saving Time permanent year-round. If this law is passed, it would impact employers as they would need to reevaluate how they handle shifts that cross midnight.

Under the proposed Sunshine Protection Act, employers would need to consider how to handle shifts that break midnight during the spring and fall months when daylight-saving time transitions occur. For example, if an employee's shift usually starts at 11 p.m. and ends at 7 a.m., during the spring when clocks "spring forward," the shift would technically start at midnight and end at 8 a.m. Employers may need to adjust schedules, communicate changes to employees, and potentially update payroll systems to accommodate the shift in hours. Additionally, employers in states and localities that do not recognize Daylight Saving Time may need to adjust their operations to account for any discrepancies in time zones.

Job Duty and Daylight Savings

Employers should also consider an employee's job duty when determining how Daylight Savings will impact their pay. For example, if an employee is required to work overtime during Daylight Savings because of a specific job duty, they should be compensated accordingly.

Failure to pay an employee for overtime work during Daylight Savings can result in legal disputes and penalties. Employers must ensure that they are acting in compliance with federal and state labor laws. Failure to pay employees appropriately can lead to lawsuits, damage a company's reputation, and ultimately lead to financial loss. Employers can mitigate legal disputes by clearly communicating their policies regarding Daylight Savings and overtime pay, and ensuring that employees are compensated appropriately. Additionally, employers should consider flexible scheduling, remote work, or other accommodations during Daylight Savings to avoid unnecessary stress on employees and potential legal issues. Overall, it is important for employers to prioritize fair compensation practices for their employees, especially during Daylight Savings, to maintain a positive work environment and avoid legal implications.

Time Zone Differences

Employers should also consider time zone differences when determining how Daylight Savings impacts their employees. For example, an employee who travels across time zones for work may experience Daylight Savings differently from other employees in the same time zone.

It is important for employers to be aware of the potential impact of Daylight Savings on employees who may be traveling across time zones for work. This can include jetlag, disrupted sleep patterns, and difficulty adjusting to the time change. Employers can offer support by allowing for flexible schedules, providing resources for improving sleep and coping with jetlag, and being understanding of any delays or difficulties that may arise due to the time change. 

It is also important to communicate with employees about any changes in meeting times or travel schedules that may occur as a result of the time change. Overall, taking into account the time zone differences and potential impact of Daylight Savings can help employers ensure that their employees remain productive and healthy during this time.

What Day does Daylight Savings Occur?

Daylight Savings begins on the second Sunday in March and ends on the first Sunday in November. Employers should ensure they are familiar with these dates to accurately calculate employee pay during Daylight Savings.

Daylight Savings is a period in which clocks are adjusted forward by one hour to maximize the amount of daylight available during the summertime. This period affects the normal working hours of employees, including their schedules and wages. Employers must be aware of these dates to avoid any problems with employee payroll, as the adjustment in time can result in discrepancies in record keeping, overtime pay, and benefit accruals. 

It is recommended that employers communicate any changes related to Daylight Savings to their employees in advance. By doing so, employees can adjust their schedules accordingly, and employers can ensure accurate payroll and compliance with labor laws.

Observing Daylight Savings

Employers are legally required to observe Daylight Savings, with the exception of Hawaii and Arizona. Employers should ensure they are observing Daylight Savings in accordance with federal law to avoid any potential legal issues.

Daylight Savings is a federal law that regulates the time change based on the seasons. It was originally implemented to conserve energy, increase productivity, and provide more daylight for outdoor activities. Employers must comply with Daylight Savings so that their employees’ working hours reflect the legal time. 

The time change can often cause confusion and disruptions if not properly implemented. Employers must ensure that their employees are aware of this time change and adjust their schedules accordingly. Failing to comply with Daylight Savings could result in potential legal issues, such as wage and hour disputes or violations of state and federal labor laws. Therefore, it is important for employers to stay updated on Daylight Savings regulations to prevent any legal complications.

Navigating DST and employee pay can be a daunting task for employers, but with the right information and tools, it can be manageable. It's important for employers to stay up to date on state laws and labor agreements, and to communicate any changes related to DST to their employees in advance. By prioritizing fair compensation practices and compliance with labor laws, employers can avoid legal issues and maintain a positive work environment for their employees.

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