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1 D. Unauthorized overtime must still be paid. B. Employees cannot waive wages or overtime rights. 1. Core Compliance Principles A. If work is performed, it must be paid—without exception. E. Supervisors are accountable and may face personal liability. SOP for Timekeeping and Wage and Hour Practices C. Time records must reflect reality—not schedules, targets, or budgets. Volunteering, comptime,“I’llowe youone,” or informal agreements do not override the law. Agreement by the employee does not cure a violation. “Work” includesall time ERMCOknows orshould know is being performed, whether authorized or not (pre‑/post‑shift activities, short breaks, after‑hours calls, worked meal periods, PPE donning/doffing, waiting time). Failure to pay triggers back wages, liquidated damages, and audit risk. Timekeeping documentsactualhours worked,notplannedhoursor productivity goals. Any practice that suppresses reported time (rounding, auto‑deducts, edits) is unlawful if it benefits ERMCO systematically. Pay first; manage disciplineand/or performance separately. Scheduling or policy violations are addressed through coaching or discipline— not by withholding payor altering timerecords. Leaders canbepersonally liablefor directing,permitting, or ignoring violations, including off‑the‑clock work, timecard manipulation, and misclassification. Audience: ERMCO Production leaders who directly manage nonexempt employees; Production leaders responsible for timekeeping and payroll oversight; and HR personnel involved in compliance and employee relations. Purpose: This SOP establishes ERMCO’s mandatory wage‑and‑hour compliance requirements, consistent with federal and applicable state law, as reinforced in the “Leading with Accountability” training. This SOP governs day-to-day operational conduct.
2 Good intentions, production pressure, or “how it’s always been done” are not defenses. Off‑the‑clock work occurs whenever a non‑exempt employee performs work without recording or being paid for that time. This practice is unlawful and creates significant risk. For non‑exempt employees, the following time must always be recorded and paid, regardless of whether it was scheduled, authorized, or expected: Any work performed before or after the scheduled shift, including equipment preparation, staging materials, cleanup, or wrap‑up activities. Time spent putting on or removing gear that is required for the job or necessary to perform work safely. All breaks of 20 minutes or less, whether planned or taken due to operational demands. Any mandatory instruction, orientation, huddle, or safety activity, whether during or outside normal shift hours. Time when employees are required to remain on site, on standby, or otherwise restricted and unable to use the time for their own purposes. Travel between job sites or facilities once the workday has begun. Calls, texts, emails, or troubleshooting performed outside scheduled hours at ERMCO’s direction or for ERMCO’s benefit. Work done before clock‑in or after clock‑out whenever a supervisor knows, observes, or reasonably should know the work occurred. 2. Hours Worked C. Shortrestbreaks A. Pre‑shiftandpost‑shiftwork H. Anyworkperformedofftheclock. 3. Off-the-Clock Work – Strictly Prohibited D. Requiredtraining,meetings,orsafetybriefings E. WaitingorstandbytimecontrolledbyERMCO B. DonninganddoffingrequiredPPEorsafetygear F. Travelbetweenjobsitesduringtheworkday G. After‑hourscalls,texts,emails,orproblem‑solving Leader Obligation: If you observe, direct, benefit from, or reasonably should be aware that work is being performed, you are responsible for ensuring the time is accurately recorded and paid. Failure to act—even once—can constitute permitting off‑the‑clock work.
3 Leaders must Do not allow it to continue, even briefly. Ensure the employee clocks in or records all time worked. Pay for all hours worked, including any resulting overtime. D. Escalate recurring or systemic issues to HR Patterns require review and corrective action beyond the individual incident. Including early starts, late finishes, or “just wrapping up.” If an employee performs any work during a meal break, the time must be paid. Badge or swipe data Production logs or output Observed early arrivals, late departures, or work activity Statements such as “just this once,” “help the shift,” or “we’re behind” do not excuse unpaid work. Accurate timekeeping is a legal obligation. Any practice that suppresses hours worked or alters records to manage labor costs is prohibited and creates significant risk. Supervisors must : Required response to prohibited conduct must be immediate and mandatory. When off‑the‑clock work occurs—or is suspected—leaders must: Time worked must be paid as recorded; edits may not be used to manage hours or correct scheduling issues. 4. D. Use informaljustifications A. Stopunpaidwork immediately B. Requireaccurate timerecording C. Correctthetime record Timekeeping Integrity & Timecard Edits NEVER A. Altertimerecordstoreducehoursworked NOT (zero tolerance): A. Permit work tooccurbefore clock‑inor afterclock‑out B. Allow work duringunpaid mealperiods C. Ignore indicatorsthatwork is occurring offtheclock Knowledge standard: If you know, observe, or reasonably should know the work is occurring, ERMCO is considered to have permitted the work. Reminder: Failure to act—even once—can be treated as permitting off‑the‑clock work. Silence, inaction, or “looking the other way” exposes ERMCO and the supervisor to liability.
4 A. Reason for Correction Additional Documentation Rules: B. Employee Acknowledgement C. Supervisor Authorization A. Legitimate business reason is documented B. Time may not be “cleaned up” to avoid overtime Documentation Requirements for Timecard Corrections All timecard corrections must satisfy all three of the following requirements: B. Employee is notified and acknowledges the change C. HR or Payroll approval is obtained D. Use rounding practices that benefit ERMCO systematically Reminder: If anyone of these elements is missing, do not edit the record. C. Apply automatic meal‑period deductions when work was performed Key principle: Time records must reflect reality—not schedules, targets, or budgets. Permissible Time Record Corrections (Narrow Exception) – Time record corrections are permitted only if all three requirements are met: Thereason must befactual,specific,and related to correcting an error—not managing costs. Employees must be informedof what changedand why. Supervisors may not unilaterally edit timerecords. Shifting, deleting,orreclassifyingtimetokeep an employee under 40 hours is unlawful. Ifan employeeworksthroughamealbreak—evenbriefly—thetime must be paid. Roundingisprohibitedifitconsistentlyreducesemployee hours or pay. Corrections must be entered into ERMCO’s authorized timekeeping system. Shadow logs, whiteboards, or informal tracking are prohibited. Supporting documentation must be retained in accordance with ERMCO’s record‑retention requirements. Repeated corrections, edits affecting overtime, or post‑payroll changes must be Thespecificreason for the correction must be documented (e.g., missed punch, systemerror). Theemployee must confirm the accuracy of the corrected time. Asupervisor must approve the correction without reducing hours worked.
5 escalated to HR for review. Missing or inadequate documentation may itself constitute a policy violation. Misclassification is one of the highest‑risk wage‑and‑hour violations and frequently results in back pay and liquidated damages. Leaders must not: Overtime requirements are legal mandates. Leaders must ensure overtime is accurately tracked and paid, regardless of scheduling preferences or operational pressure. A workweek is a fixed, recurring 168‑hour period. Once established, it may not be manipulated to avoid overtime. Excess hours in one week cannot be offset by fewer hours in another. Offering time off later in lieu of overtime pay is prohibited and does not cure a violation. Scheduling additional hours to “make up” for a denied raise or bonus distorts time records and creates liability. If an employee works the hours, they must be compensated at the overtime rate— even if the work was not approved. Coaching or discipline may follow, but pay may never be withheld or reduced. Employees whose primary duties are manual, shift‑based, or production‑focused are almost always non‑exempt, regardless of tenure or responsibility. Salary and titles alone are irrelevant. Exempt status depends on actual day‑to‑day duties, not labels. 6. 5. Overtime Rules Exempt vs. Non‑Exempt Classification E. Unauthorizedovertimemuststillbepaid. B. Hoursmaynotbeaveragedacrossworkweeks. C. Comptimemaynotreplaceovertimepay. A. Classifyproductionorhands‑onrolesasexempt B. Assumesalarylevelorjobtitlecreatesanexemption A. Overtimeisgenerallydueafter40hoursinaworkweek. Key principle: Overtime is a pay requirement, not a scheduling preference. Leaders manage overtime through planning and staffing—not by suppressing hours worked or altering time records. D. Overtimemaynotbeusedasarewardorsubstituteforcompensationdecisions.
6 7. Escalation & Reporting Obligations Repeated early starts or late finishes E. Use independent contractor labels improperly Any mention of contacting the DOL or an attorney Worked‑through meal breaks Systemic timekeeping practices that suppress hours C. Leave employees classified as exempt after duties materially change D. Treat high performers as “managers” without meeting the duties test Complaints or concerns about unpaid time or reports of pressure to hide hours Leader Obligation: When job duties change, classifications must be re‑evaluated immediately with HR. Delays, assumptions, or informal decisions can create months—or years—of automatic liability. Leader Obligation: If you know, observe, or reasonably should know of these issues, escalation is required. HR Obligation: HR must escalate to Legal immediately when issues appear systemic, recurring, multi‑employee, or facility‑wide, or when there is any risk of regulatory inquiry, litigation, or retaliation. Whenrolesevolvetoward hands‑onor productionwork,theexemption often failsand liabilityaccrues retroactively. Being a lead,trainer, or go‑to employee doesnotqualifysomeoneas exempt unless theymeet strict legal criteria. Calling someone a contractor does notmake them one. Misclassification in this area triggers wage, tax, and benefits exposure. Leaders have an affirmative duty to escalate wage‑and‑hour issues promptly. Delay, inaction, or informal handling increases legal exposure. HR or Legal should be notified immediately upon awareness of: Includingpatternsofemployees arriving early, staying late, or “just wrapping up” off theclock. Any instance where anunpaid mealbreakisinterrupted or skipped for work. Repeated time edits, rounding practices,auto‑deductions, or “perfect” 40‑hour timecards. Allegations of unpaidwork,pressuretohidehours,orretaliationfears—formal or informal. Mentionsof contactingtheDepartmentofLabor (DOL), an attorney, or filing a wage complaint. E. B. C. A. D.
7 Adverse actions include discipline, reduced hours, schedule changes, negative assignments, demotion, termination, or any conduct that could discourage reporting. Note: Retaliation is a separate and serious violation. Even if the underlying allegation is corrected, unfounded, or resolved, retaliatory conduct remains independently unlawful. General Reminder: Do not attempt to resolve wage‑and‑hour issues informally or in isolation. Early escalation protects employees, supervisors, and ERMCO by enabling timely corrective action and legal compliance. 9. 8. Anti‑Retaliation A. Reporting time accurately B. Raising a pay concern C. Participating in a wage investigation D. Refusing to work off the clock Personal Liability Triggers for Leaders A. Direct, encourage, or permit off‑the‑clock work B. Edit, approve, or influence time records C. Pressure employees not to report time or overtime Supervisors may be personally named and held liable in wage‑and‑hour claims when their actions—or inaction—contribute to violations. Supervisors may be personally named in wage claims when they: Allowingearlystarts,latefinishes,workedmeal breaks, or after‑hours work without pay. Anyinvolvementinreducing,shifting,or“cleaning up” hours worked. Retaliation for wage‑and‑hour compliance activity is strictly prohibited and exposes ERMCO and individual leaders to separate and significant liability. No leader may retaliate against an employee for: Includingreportingovertime, correcting time records, or refusing to underreport hours. Whether formal or informal, verbal or written. Internal review, HR inquiry, audit, or external agency process. Declining unpaid workbefore clock‑in, after clock‑out, during meal periods, or after hours.
8 Including subtle discouragement, comments about budgets, or implied consequences. Scheduling unnecessary overtime to replace raises, bonuses, or other pay decisions. Repeated early/late work, “perfect” 40‑hour timecards, excessive edits, or auto‑deduct anomalies. Treating production or hands‑on roles as exempt or misusing contractor labels. Reminder: Supervisors are accountable for what they direct, allow, or knowingly ignore. Good intentions, production pressure, or “this is how we’ve always done it” are not defenses and do not insulate leaders from personal liability. When a wage‑and‑hour violation or pattern is identified, leaders must take prompt, documented corrective action. Delay or informal handling increases legal exposure. Required Steps Cease the non‑compliant activity at once (e.g., off‑the‑clock work, improper edits, auto‑deduct errors). Secure timecards, edit logs, schedules, badge/swipe data, production logs, communications, and payroll records. Determine who is affected, when it began, how long it lasted, and whether the issue is isolated or systemic. Pay all wages owed, including overtime premiums, regardless of authorization. Corrections must be accurate and timely. Modify staffing, scheduling, system settings, controls, or training to prevent recurrence. Coaching or discipline may be appropriate, but pay may not be withheld, reduced, or adjusted to manage behavior. 10. Corrective Action Protocol E. Implementoperationalfixes B. Preserveallrelevantrecords A. Stopthepracticeimmediately D. Calculateandissuebackpayasrequired C. Assessthefullscope(who,when,howlong) D. Use hourstomanagecompensationoutcomes F. Participateinorapprovemisclassificationdecisions E. Ignoreknowntimekeepingpatternsorwarningsigns F. Addressperformanceorconductseparately—neverthroughpay
9 During the Shift Before Work Begins Overtime & Scheduling Appendix A Supervisor Quick‑Action Checklist on the clock Reminder: Correcting pay is mandatory; managing behavior is separate. Always pay for time worked first, then address performance through appropriate channels. Bottom Line Expectation: ERMCO does not manage labor costs by suppressing time. Leaders are expected to manage time accurately, escalate issues early, and protect both employees and the company by complying with the law. This SOP is designed to comply with federal wage‑and‑hour law. Where state or local law provides greater employee protections (including overtime, meal and rest periods, daily overtime, or recordkeeping), the stricter standard applies. Supervisors must consult HR before deviating from standard practices based on location‑specific requirements. Confirm employees are clocked in before performing anywork. Ensure that required PPE, tools, or prep activities occur Check that no work is performed during unpaid meal periods. .’ Confirmall worktimeiscaptured, including: Pre-shiftandpost-shift taskso o WaitingtimeunderERMCO’s control o After-hourscalls,texts, or system access Verify that restbreaks(20minutes or less) are treated as paid time. No employee isdiscouraged—explicitly or implicitly—from recording time worked. Overtime is approvedinadvance where possible. If overtime is worked(authorized or not), all time is paid. Overtime is neverusedtooffset denied raises, poor planning, or performance issues. Supervisors are expected to actively use the checklist below as part of daily and weekly supervision. Failure tofollow these steps may result in discipline and personal liability exposure.
10 Escalation Timecard Review Timecardsare reviewed for accuracy each pay period. Nosupervisor edits time to reduce hours worked. Anycorrections meet documentation requirements. Patterns, repeat issues, or grey areas are escalated promptly to HR. Possible off-the-clock work, manipulation, or retaliation concerns are escalated immediately.