Time to Comply: Tracking Employee Overtime is Serious Business.

 

Compliance with the U.S. Fair Labor Standards Act (FLSA), especially as it relates to overtime pay, is increasingly crucial. The burden of proof is 100% on the employer to comply with FLSA regulations.

Many unclassified employee groups have filed, and won, suits against for-profit and non-profit organizations for underpayment of overtime. This can be costly for your organization. Penalties include retroactive payments of twice the amount of overtime owed, along with legal fees.

What Is the Fair Labor Standards Act?

FLSA advocates for workers by establishing minimum-wage, overtime, and child labor standards in the United States. These standards usually apply only to hourly employees, but some salaried employees also are covered under FLSA.

What Does the FLSA Say About Overtime?

According to FLSA wording, overtime must be paid at 1.5 times the employee’s average pay rate after the employee has worked 40 hours. Because some employees work at different rates throughout the week, it can be complicated to calculate a fair overtime wage.

First Steps to Compliance

An important step to quickly becoming compliant with FLSA regulations is to adopt timekeeping practices that accurately record employees’ time and overtime.
Timekeeping can be dramatically improved with the use of time recorders and time and attendance software that keep a precise record of the exact minute employees begin and end work.

As an example, if an employee performs diverse tasks with different pay rates, Attendance on Demand tracks the time spent performing each task and calculates an accurate wage. When an employee passes the 40-hour threshold, time is automatically recorded and paid as overtime.

Keeping An Eye on Overtime

All calculations happen behind-the-scenes. Even in complex situations where employees earn different hourly rates for several types of work, companies can automatically calculate and track hours using an overtime rate that is compliant with FLSA.

For many organizations, the road to FLSA compliance becomes easier with automated employee time tracking systems.