For years, a contracting company let employees come into the office to drink coffee and talk before work began. A disgruntled person left the company and went to the U.S. Labor Department to see if he could take revenge on the company. He told them about coming to the shop and not getting paid until the workday officially started at 8 a.m.
The department investigated and found that employees, in fact, were not being paid from the time they arrived. The proposed fine? $250,000.
I have no clue whether the Department of Labor will settle on a smaller figure or accept payment terms. The contractor just got notice.
They can say goodbye to profits this year, and maybe goodbye to the company if the Department of Labor imposes the total fine and won’t accept payment terms.
Think it’s an isolated occurrence? Another contractor had a morning meeting each Monday. The HVAC technicians were not paid for the meeting. As with the other story, a disgruntled employee left the company and went to the Labor Department. He found out that the company should have paid employees for such meeting time.
The government investigated. They looked at all of the timesheets for the past three years. Sure enough, technicians were required to be at the meeting and were not paid for it.
Each technician got 156 hours of back pay plus interest. On top of the technicians’ payments, the Department of Labor levied a $35,000 fine.
You can’t afford either fine, and many disgruntled employees will do what they can to get back at your company.
Follow the rules
Follow the rules in your state. Most require that you pay them from the time they arrive at your shop to the time they leave your shop. This means if they come back in the afternoon to do paperwork, get parts or hang out, you have to pay them.
That’s why you should send technicians to their first service call directly from their homes. You can start their pay clock when they arrive at the job. Their day ends when they finish the last job as long as they don’t come to the shop on their way home.
Installation crews should show up at their appointed time and get their materials quickly. Better yet, materials should be loaded onto their trucks before they arrive. All the crews then have to do is come in and pick up the truck. That takes five minutes. Discussions about the project? You have to pay them for the talk. Cleaning out their truck? You have to pay them to do it.
Don’t allow your hourly employees to come in early or stay late unless you’re prepared to pay them. If a meeting is mandatory, employees must be paid if they attend. One disgruntled employee can cost you thousands of dollars in profit or put your company out of business. Don’t take a chance.
Copyright Ruth King. All rights reserved. Write to Ruth King at Profitability Revolution LLC, 1650 Oakbrook Drive, Suite 405, Norcross, GA 30093; email email@example.com; call (770) 729-8000.