Wage and Hour Compliance

What is wage and hour compliance?

Wage and hour compliance is an employer’s responsibility to follow the laws are regulations that affect the business. In the US, there are federal, state and local wage and hour laws. In addition, there are wage and hour regulations set by unions. Wage and hour compliance can also refer to the policies, systems and processes an employer uses to maintain compliance.

How can I comply with wage and hour laws?

• Know current federal and state laws
• Update your company policies and employee handbook with legal guidance
• Train managers, HR, executives, and employees
• Ensure your corporate culture supports a safe, legal, and welcoming environment

What is the best HR software for wage and hour compliance?

An HRMS (Human Resources Management System) is a unified system for HR processes. It helps employers comply with wage and hour laws.

• Onboarding: HRMS onboarding tools provide a convenient, paperless way for employees to complete tax forms, compare benefits plans, and enroll in the payroll system from a mobile device.
• Time and Attendance: Tracking employee work time accurately is essential for compliance. An HRMS timekeeping module accurately tracks hours and makes it easy for employee to punch in and out for shifts. Employees don’t have to fill out paper timecards which helps ensure employers don’t incur a compliance violation due to an inaccurate timecard. The clock reminds employees of missed punches so they can fix them before payday. Managers can set alerts to prevent overtime, helping to avoid an overtime violation. An HRMS also tracks meals and breaks, tips, FTEs, and non vs. non-exempt status.
• PTO and Sick Leave: Tracking PTO accruals affects payroll and FMLA compliance. You can configure an HRMS for company PTO policies, FMLA, and state family, medical and sick leave laws.
• Payroll: An HRMS syncs with your payroll system which creates payroll integrity. This is important for helping employers avoid wage and hour compliance violations.
• Employee Scheduling: Poor scheduling can increase the risk of wage and hour violations. For example, scheduling a non-exempt employee for overtime and then not paying the overtime rate would incur a violation. Predictive scheduling and fair workweek laws require a capable HRMS employee scheduling solution for compliance. With an HRMS, managers can post schedules early and more easily create fair, compliant schedules.

Wage and hour laws that affect most employers:

• Minimum wage
• Child labor
• Overtime laws
• Meals and rest breaks
• Sick leave
• Employee classification (exempt vs. non-exempt)

What are the federal wage and hour laws?

The following federal laws apply to employment:

• FLSA (Fair Labor Standards Act)
• FMLA (Family and Medical Leave Act)
• EEOC (Equal Employment Opportunity Commission)
• ADA (American with Disabilities Act)
• ACA (Affordable Care Act)
• Occupational Safety and Health Act (OSHA)
• Payroll Based Journal (PBJ)–census data reporting for Long Term Care and Nursing Home facilities

Most of the laws that affect employee wages and work hours are found in the FLSA.

What if a state law conflicts with a federal wage and hour law?

Some states have laws that differ from the FLSA. It’s important for employers to remember, however, that they must follow both the state and federal law. If the regulations conflict, the employer must follow the higher standard. In other words, the laws that gives the greatest benefit to the employee. For example, if the state has a minimum wage higher than the federal one, the employer must comply with the state minimum wage. For information about laws in your state, contact your state Department of Labor. You can find your state’s DOL contact information here: State Labor Offices.

If I only have a few employees, am I subject to wage and hour laws?

The regulatory burden increases as your workforce grows. All employers are subject to the Fair Labor Standards Act (FLSA). When you hire your 11th employee, you are subject to the Occupational Safety and Health Act (OSHA). At 15+ employees, the Americans with Disabilities Act (ADA) kicks in. When your staff hits 51, the Affordable Care Act (ACA) applies.

See also

• Wage and Hour Laws
• Minimum Wage Laws
• Employee Overtime
• Meals and Rest Breaks
• Fair Labors Standards Act (FLSA)
• Family and Medical Leave Act (FMLA)
• Americans with Disabilities Act (ADA)

Additional resources

• Compliance Assistance, U.S. Department of Labor, Wage and Hour Division
• Wages and The Fair Labor Standards Act, US Department of Labor
• Complying with U.S. Wage and Hour Laws and Wage Payment Laws, SHRM
• Why LMS Compliance Training is an Onboarding Must-Have, Swipeclock
• How to Improve Your Onboarding Process (COVID & Remote Work Issues), Swipeclock
• Your Independent Contractors Are Probably Employees, Swipeclock
• How to Write and Update Your Employee Handbook, Swipeclock
• Employers: Don’t Make These Top 13 FMLA Mistakes, Swipeclock
• Time and Attendance: Timekeeping, Policies, Software, Compliance, Templates, Swipeclock