5 Labor & Hour FLSA Mistakes to Avoid
The FLSA deadline is quickly approaching; have you familiarized yourself with all of the FLSA provisions? Are you ready to implement necessary labor and hour policy changes? Learn about 5 of the most important considerations for avoiding FLSA mistakes and lawsuits.
These considerations are in no particular order of importance, but considering each issue on its own and within the context of the other issues helps illuminate the complex and often compounded nature of FLSA labor and hour provisions. Some FLSA mistakes, even if seemingly slight, can cost employers extraordinary amounts in lawsuits, fines, legal fees and more. Even one unpaid dollar for a multitude of reasons can be an extremely costly FLSA mistake.
Here are 5 of the top issues for FLSA mistakes:
Employee misclassification or failure to re-classify employees
- Auditing the classifications of your employees is important. Millions of employees who were once considered exempt may now be considered non-exempt and therefore qualify for overtime. For help defining employee classifications, visit the DOL’s overview on exemptions under the FLSA and the final rule.
- Employees who discover they are misclassified and therefore underpaid (due overtime) may be owed back pay and liquidated damages (up to twice the back pay), up to and including legal fees incurred to pursue back payment. Amounts owed vary by case.
- Bottom line: Ensure your employees are classified correctly based on the Final Rule. This should be done by December 1, 2016, so they are being paid according to all intended overtime protections and a fair day’s pay.
- Employers may try to avoid overtime or even have a policy banning it. However, the FLSA requires the employee to be paid for overtime hours actually worked.
- The FLSA does not prohibit employers from disciplining or terminating employees who violate overtime policies. It is important to note, thought, that the employee must still be paid all due overtime hours worked.
- Bottom line: While employers may discipline and even terminate employees who violate overtime policies, employers must still pay any overtime hours worked to steer clear of FLSA mistakes.
Off-the-clock work violations
- Employers are required to pay employees for any function performed that is part of the job. This includes pre- and post-shift set-up and clean up work, warming up/gassing up company vehicles, administrative work (including checking emails and voicemail), waiting for a project or task to be assigned when there is no immediate task available, working through a paid break, etc.
- Bottom line: If your employee is working, you must pay them for the time they are working.
- The most common break violations occur when employers enable automatic deductions for lunch breaks without giving employees the ability to correct the deduction if they did not take the break or they worked through it. When these violations occur, employees are due compensation; it can add up to significant back pay.
- Other common break violations include missing a break, breaks cut short, or breaks that are interrupted by work duties. Many states differ on meal and rest break laws, like California‘s laws.
- Learn how to implement a rest and meal break policy that helps the employer stay compliant while encouraging a better break culture throughout the organization.
- Bottom line: Implement processes to ensure employees have a policy-adhering breaks. Plus, consider implementing a method for editing or providing feedback for paid break time in case a break is interrupted by work or missed altogether.
Attendance and time keeping
- Millions of employees who were previously not required to clock in/out will now be required to track their worked hours. While many employers already have a system in place, the employees who are not accustomed may need additional reminders or training.
- Employers who don’t have a computerized or automated system in place are at risk for errors in tracking, recording and reporting time and attendance information. This leaves them vulnerable to FLSA lawsuits.
- Accurate records will provide an audit trail in the event of any FLSA mistakes. It was also help ensure employees are following the new provisions (like unauthorized overtime and break violations).
- Bottom line: Attendance systems need not be complicated or expensive. Browse our solutions to find the right fit for your needs. From traditional time clocks, to facial recognition, to cloud-based and mobile apps like DayTrack, we have a solution to help you avoid FLSA mistakes.