You’ve probably heard the old adage that “nothing in life is certain but death and taxes.
Records and Requirements
3rd in a 4-part series
In Exempt vs. Non-exempt Employees, we briefly went over the differences between exempt and non-exempt employees, as laid out in the FLSA. Of course, these distinctions are much more complex than what we've provided in our series, and we hope you'll take the time to investigate further with an attorney who specializes in employment law.
Once you've noted which positions in your company fall under each category, you can begin keeping records for each employee. Remember the Department of Labour auditors can review your timekeeping and payroll records at any time. If you're found in violation of the FLSA, you could face steep penalties.
Here are the basics to keep your records on track:
The records described above must be accurate, and kept on file for at least three years. Supplementary information must be saved for at least two years.
All time and payroll records must be kept at the place of business or in a central storage location. Whether maintained on paper, in microfilm, or on a computer-based system, the data must be readily available in the event an auditor wishes to inspect them.
Consequences of Non-compliance
The Department of Labor has investigators in 400 offices around the country, who regularly engage in rigorous workplace inspections. If you don't comply with FLSA regulations, you could be liable for back payments to employees as well as fines and/or criminal prosecution:
- Firing or discriminating against an employee for filing an FLSA complaint can result in fines up to $10,000. A second offense can result in a prison sentence
- Failing to comply with FLSA youth labor laws exposes employers to criminal prosecution and fines up to $11,000
- Wilful or repeated minimum wage or overtime pay violations may be subject to a civil penalty of $1,100.
Watch for our final chapter on FLSA, Make Timesheets Work for You to see how automated timekeeping software can help you avoid litigation!
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