Fair Labor Standards Act (FLSA): Know the Rules and Avoid Litigation

Fair Labor Standards Act (FLSA)

Common Mistakes Employers Make

1st in a 4-part series

With the economy in its current state of flux, it seems lawsuits are popping up everywhere – usually as a result of companies not paying their employees accurately.  This isn’t a new problem; for years the Department of Labor has audited businesses for their fair labor standards, making sure employee information is on file and that employees are paid for their time worked.

But too many businesses are unprepared.  They either have no internal record keeping processes, or the processes they do have in place are inefficient.  In simple terms, they lack the proper “paper trail”.  Whether the problem is revealed during an audit or the company faces litigation from disgruntled employees, the result is the same – fines, legal penalties, and large settlements for overtime back pay.

The Fair Labor Standards Act (FLSA) defines – in detail – which employees should receive overtime, and when.  It also clearly lays out the minimum wage requirements and record keeping standards employers should follow.

Here are the most common mistakes employers make when it comes to employee tracking:

  • Assuming all salaried employees are exempt
  • Failing to keep timesheets/timecards for non-exempt workers
  • Failing to track clock-in and clock-out times
  • Failing to keep records of unauthorized overtime
  • Failing to track off-the-clock work
  • Failing to record and/or pay for breaks
  • Failing to keep accurate time and payroll records.

During the next week, we’ll be looking at some of the specifics of the FLSA.  Come back soon for the next part in this series: Non-exempt vs. Exempt Employees.

 

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