Are You Guilty of These FLSA Employee Time Tracking Violations?
By: Shannon Corgan, WorkMax Director of Marketing
With so many priorities for your business, it’s difficult to know that you’re following all the rules for tracking your employees’ time to comply with the Fair Labor Standards Act (FLSA) and avoid fines from the Department of Labor. There are seven common FLSA mistakes. Are you guilty of any of these Seven FLSA Fails for Employee Time Tracking? A few of these mistakes were the reason that this month a pool builder in Houston, had to pay $115,786 in back wages to 68 employees for FLSA overtime violations. They made an FLSA faux pas by paying flat salaries per week or flat rates per job to drivers, mechanics, finishers, and others regardless of the number of hours their employees worked. They didn’t pay overtime when these employees worked more than 40 hours in a week. Additionally, they did not have an employee time tracking process in place to capture the actual number of hours the employees worked per day and per a week. That’s a FLSA recordkeeping no-no.
So, how do you make sure you’re not the next one on the list for a Department of Labor investigation? Let’s take a look at three ways this Houston pool builder, could have kept the Department of Labor away:
1. Paying Non-exempt Workers Hourly Rates – Just because you’re paid for a project based on project milestones or project completion, it doesn’t mean you can pay your non-exempt manual laborers the same way. In the construction industry, some of your jobs are paid per job, but the way that your business earns your income does not affect the way that you are responsible for paying your employees to comply with the FLSA. If you do, it’s going to get you into hot water with the Department of Labor when you have non-exempt workers.
2. Track Employees’ Time Daily and Weekly – Get accurate start and stop times and make sure you’re tracking your employees’ time on a daily and weekly basis for accurate FLSA recordkeeping. It’s your responsibility as an employer to track to your employee’s time per day and per week and to pay your non-exempt manual laborers their hourly rate and any overtime when they work more than forty hours in a week. If you don’t, you may be part of the next Department of Labor investigation. The Department of Labor can recover back wages and also assess you a penalty of up to $1,100 for each willful or repeated violation for overtime. You can read the full list of all of the FLSA recordkeeping requirements here.
3. Paying Employees Overtime for Over 40 hours Worked – If you’re not accurately capturing your employees’ time on a daily basis (with accurate start and stop times), it’s tough to get accurate weekly totals for overtime calculations. When you have non-exempt employees, according to the federal overtime provisions contained in the Fair Labor Standards Act, non-exempt employees must receive overtime pay at least one and a half times their hourly regular rates of pay. According to the Department of Labor, you don’t have to pay overtime for work on Saturdays, Sundays, or holidays unless your employee worked more than 40 hours in that work week. This is based on the federal regulations covered in the FLSA. Some states may have additional wage and hour legislation that may require you to pay overtime for other circumstances other than the federal FLSA regulations.
Using an accurate employee time tracking solution like WorkMax TIME is sure to keep the Department of Labor off your back. You can capture daily clock INS/OUTS of all of your employees on paper, but paper doesn’t give supervisors and payroll staff back at the office the visibility into what employees are doing in real time when they are not at the job site. You can’t be proactive and see in real time who forgot to clock IN/OUT for the day to accurately track the hours they work. WorkMax TIME handles complex overtime tracking and calculations and automatically calculates your employees’ overtime, so there are no issues with not paying your employees when they work over 40 hours in a week. You also get a more accurate accounting for the hours that were worked with WorkMax’s real-time data capture. Additionally, when you’re using paper time cards, there is always the element of human error. Your payroll employee could miscalculate the hours worked and make a mistake with overtime calculation. All of that is eliminated with WorkMax TIME.
To learn more about how WorkMax TIME can help you avoid costly Department of Labor FLSA fines, view our video or watch our demo on demand.