How To Avoid 4 Common Wage and Hour Pitfalls
Compliance with wage and hour laws is a complex problem that every HR manager deals with. Where federal laws end, state laws begin. It can be a daunting task to keep them all at the top of your mind.
Compliance with wage and hour laws is critical to your business. Tripping over the many pitfalls can land your company in hot water. And by “hot water” I mean everything from federal or state penalties to employee wage and hour claims.
In the past two years, wage and hour claims have tripled in cost. Laws are more refined. Employees understand their rights. Attorneys have learned the leverage points.
Maintaining compliance is more important than ever. One misstep and your business is in jeopardy. Fortunately, it isn’t hard to remain compliant and avoid wage and hour claims. Workforce management tools take the work out of compliance. Cloud-based solutions such as WorkforceHub include legal updates that keep you covered.
Here are four common pitfalls you’ll want to avoid, and how to avoid them:
Pitfall 1: Paying For All Compensable Time
When your employees are working, their time is compensable. This means that you need to track every minute your employees are working.
It doesn’t matter, either, that your employees are working “voluntarily.” If your employees are on the job, you are likely required to compensate them for their time.
The bottom line: all time is compensable.
Employers have encountered this pitfall when they think their employees are offering voluntary time. In most cases, even voluntary time must be compensated. For this reason, you need to be measuring time and attendance for every employee, all of the time.
There are several methods to avoid this common pitfall. To avoid wage and hour claims, all you need to do is measure all working hours and compensate them.
To measure your employee hours, turn to a biometric clock connected to your workforce management system. If your employees are mobile, look to mobile time tracking to empower your employees to clock in from anywhere.
Pitfall 2: Providing Pay Stubs
Employers are not required to provide a pay stub to their employers by the federal government. This is not always the case when it comes to state requirements.
Some states require you to provide a pay stub with your payroll. You are also required to provide them on demand of your employee.
This means you need to keep secure, accurate records. It also means you need to be reactive to employee requests. This can eat up time and put you in compliance risk when requests aren’t satisfied in a timely manner.
SwipeClock Workforce Management includes employee self-service to help this problem. Employee self-service allows employees access to their payroll history including pay stubs, historical time and attendance, and schedule. Employees can access their self-service portal at any time and have all their data at their fingertips.
Employee self-service is a huge time saver and will help keep you in compliance with state and federal law.
Avoiding this common pitfall is easy with employee self-service. It can also save your company a lot of time and improves your employee engagement.
Pitfall 3: Meals and Rest Breaks
Paying for meal breaks and rest breaks is often overlooked. There are some regulations out there that dictate when an employer must pay for these breaks.
Generally speaking, employers must pay for meal breaks if they are less than 30 minutes. Employers must pay for break times that are less than 20 minutes.
Most meal breaks are at least 30 minutes or more and are not paid. The critical point here is to measure and record meal breaks so that you have a defensible record of time and attendance. Clear, reliable records are the best way to defend against wage and hour claims.
The same goes for rest breaks. Most problems occur when meal or rest breaks are not recorded. Wage and hour claims regarding breaks are an easy problem to solve. Your company should never have this problem, but it is surprising to learn how many do.
The solution is easy, and it all relates back to workforce management software. SwipeClock Workforce Management software powers intelligent clocking. Intelligent clocking helps assure that your employees are clocking in and out at the right times.
It can even watch for missed punches and makes sure that punch options are contextual to help reduce mistakes.
Pitfall 4: Assuming Work Is Off The Clock
As employers, we appreciate when an employee will go the extra mile. Taking calls after hours, or showing up early to get things ready for the workday.
The problem is that these “off the clock” moments are actually compensable. Similar to our pitfall #1, assuming work is off the clock comes with a twist; while it technically is “off the clock” it is still work. It is covered by law and you are required to pay for it.
This pitfall causes trouble when an employer takes time for granted, and the employee thinks differently. The employee will win a wage and hour claim. Every time.
The way to avoid this pitfall is to assume all time is compensable, and to measure it accordingly.
Mobile time tracking can help where employees are mobile or off-site. Biometric clocks can help assure that employees aren’t buddy punching. Intelligent clocks such as those from SwipeClock help assure that employees aren’t clocking in early, or out late. They also present logical options based on the current state, so employees don’t accidentally clock in when they should clock out.
The best way to make sure you and your employees are on the same page is through communication. SwipeClock provides employee portals to help deliver information to employees about policies and procedures.
Helping your employees understand the regulations, and letting them know that you are aware, too, is a good measure toward common understanding. With common understanding and mutual respect for regulation, you can avoid costly wage and hour claims.
A Quick Note About Regulation…
This article is not a comprehensive review of the law. Laws in your region or state may differ. You may be subject to regulations not contemplated in this article.
Our intention is to introduce you to a few pitfalls to watch for, but this is by no means a complete list.
We recommend you speak with your payroll provider to learn more about compliance issues that face your business.
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