For years, a contractor I know let their employees come in to the office, drink coffee and “shoot the breeze” before work began. Seems harmless … until a disgruntled employee left the company and went to the Department of Labor to see how he could “get back” at the company. He told them about coming to the shop and not getting paid until the workday start at 8 a.m.

The Department of Labor 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 his notice.

Say good-bye to profits this year. And, maybe even say goodbye to the company if the Department of Labor imposes the total fine and won’t accept payment terms.

Follow the Rules

Most states require you to pay employees from the time they arrive at your shop until 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 technicians go to their first call from their homes. You can start their pay when they arrive at the job. Your technician’s day ends when they finish the last job, as long as they don’t come to the shop on the way home.

Installation crews show up at the appointed time and get their materials quickly. Better yet, materials are loaded on their trucks before they arrive. All the crews have to do is come in and pick up the truck. That takes five minutes.

Talk about the job? You have to pay them for the discussion. Clean out their truck? You have to pay them for it.

The Cost of Meetings

Perhaps you can afford this $35,000 fine instead.

Another contractor I know had a regular meeting each Monday morning. The technicians were not paid for the meeting. As in the first story above, a disgruntled employee left the company and went to the Department of Labor. When he found out he was supposed to have been paid for the meeting time, he informed them he wasn’t paid.

The Department of Labor investigated. They looked at all of the time sheets for the past three years (the law in Georgia). Sure enough — technicians were required to be at the meeting but were not paid for it. Each technician got 156 hours of back pay, plus interest (52 hours per year for 3 years). On top of the technician payments, the Department of Labor levied a $35,000 fine.

If you think you don’t have to pay for meeting time, here is the rule, directly from the Department of Labor. I don’t know any contractor meeting that doesn’t apply (see bullet No. 3).

Lectures, Meetings and Training Programs

Section 785.27 – General

Attendance at lectures, meetings, training programs and similar activities need not be counted as working time if the following four criteria are met:

• Attendance is outside of the employee’s regular working hours;
• Attendance is in fact voluntary;
• The course, lecture or meeting is not directly related to the employee’s job; and
• The employee does not perform any productive work during such attendance.

Section 785.28 – Involuntary Attendance

Attendance is not voluntary, of course, if it is required by the employer. It is not voluntary in fact if the employee is given to understand or led to believe that his present working conditions or the continuance of his employment would be adversely affected by non-attendance.

The days of letting employees come in early or stay late are over. The days of employees not getting paid for meeting or going to training on their own time are over. Just one disgruntled employee can cost you thousands of dollars in profit, or put your company out of business.

Make sure you stay abreast of the law. You will have non-productive employees who you will fire. They are costing your company money. You give them a verbal warning, a written warning and still no improvement. There should be no surprise to them when they are fired.

Yet, these fired employees take no responsibility for their actions. They want revenge because you disrupted their ability to put food on their tables and keep a roof over their heads.

These disgruntled employees will try to find everything they can to get back at your company (and these were just two recent examples I encountered).