US DOL Clarifies the Meaning of Compensable Time Under The FLSA

On May 15, 2008, the U.S. Department of Labor issued guidance that clarified how companies must pay workers for compensable time under the Fair Labor Standards Act. The update confirmed that companies must count missed meal periods and extra shift reporting time as paid work time. This also impacts overtime calculations.

What the DOL Confirms

First, the guidance stresses wage minimums for all compensable hours. It also removes confusion on overtime timing. Importantly, the rules state that management sets work rules. So, management must also stop unpaid work from happening. Simply writing a policy against extra work no longer protects companies from payment duties.

Worker Pay Rules Explained in Active Terms

Employees earn pay when:

• They work during a missed meal break
• They report before their shift starts and begin tasks
• They stay after their shift ends and keep working duties
  In these cases, companies must pay at least the state or federal minimum wage. Additionally, they must add time-and-a-half premiums on any hours worked beyond 40 in a week.

Management, Not Workers, Carries the Pay Accuracy Duty

Because companies design schedules, they must also track pay correctly. Moreover, if companies don’t want work to happen, managers must stop it. Cutting pay based on missed meal time or early clock-ins is not allowed. Still, rounding time is allowed, but only when companies avoid underpaying over time. The system must show fair hour balancing.

Premium Pay Can Be Separated From Regular Wage Rates

Also, companies sometimes add premium pay after set daily or weekly hours. In these cases, the law allows them to exclude premiums from the regular wage rate. However, this premium pay may still count as a credit toward statutory overtime payments.

Fair Time Rounding Is Still Legal – But Only When It Works Fairly

Companies may log hours to the nearest 5 minutes if they apply rounding fairly. Yet, managers must avoid rounding patterns that reduce pay long-term. For example, repeated rounding that slowly blocks full hour pay is illegal. Still, accurate rounding that balances time both ways remains legal.

Who This Protects Most

The clarification matters most for: warehouse staff, shift workers, delivery teams, hourly healthcare staff, and temps who operate under tight company rules.

Workers Should Check Their Pay Reality

Ask yourself:

• Did you work through meal breaks?
• Do managers score your output?
• Do they control your schedule?
• Did you work overtime without premiums?
  If these answers lean yes, you likely earned unpaid compensable time.

Family & Weekly Budget Impact

When companies fail to pay compensable time, weekly budgets break first. This impacts rent, transport, meals, and school fees. So, reclaiming pay protects home stability, deadlines, and dignity.