I have had so many questions about the Fair Labor Standards Act (FLSA) regulations during my career and it’s not surprising. It’s a complicated law – mainly because it’s terribly outdated for how we do business today.
Here’s the thing, most of my clients are violating the regulations. And YOU may be too. Here are some ways to know if you’re violating the basic principles of the FLSA.
- If you consider all employees to be “salaried” without regard to the work they do or the wage they earn, you are likely in violation of the existing standards.
- If you sign off on time sheets that show “8am – 5pm” as the hours worked for every day in your pay cycles, you are likely in violation of the existing standards.
- If you know people at your company work through their unpaid lunch or unpaid breaks and you allow that behavior to occur, you are likely in violation of the existing standards.
This activity happened in every corporation I worked for and it happens with most of my clients. What?!? Yes, that’s right. Many companies – large and small – are guilty of this behavior. Why does it happen so often? Well, first of all it’s difficult to track employee’s time worked particularly with the advent of the 24/7 global economy, smart phones, and online access no matter where you are in the world. Second, when you tell a dedicated employee that they need to stop working because you don’t want to pay them overtime you likely don’t want to make that statement and the employee doesn’t want to hear it. Talk about a way to disengage someone quickly – that’s a good way to do it!
You don’t have any room for excuses anymore.
The thing is, you don’t have any room for excuses anymore. You’re in violation today. You’ll be in violation in the future. Unless you take action now. Here are some ideas.
- Think about FLSA compliance like this: everyone is entitled to earning overtime for time worked over 40 hours in a week unless you can prove an exemption to the overtime pay. So if you start with the mindset that everyone is eligible for overtime, then you can more easily back into which positions should be identified as exempt from earning overtime. Talk with me to learn how to do that!
- Once you identify which positions should be paid overtime, then it’s time to look at who may not be paid as often as they need to be. If there are a group of people who frequently work through their lunches or breaks or work late into the evening, it’s time to have a conversation with them. This is a positive employee relations conversation as much as it is about overtime compliance so go about the conversation in that manner. Talk with the group or individuals about why they are working more than the standard day. Get to know the reasons and create solutions from there. Start with a focus on the individual’s needs and then move onto how their needs can be accommodated by the business. You may not be able to accommodate their needs completely but having the conversation with them first will go a long way!
- Auditors love to look at time sheets when they come to your company to investigate infractions. The accuracy of time sheets is a top way to uncover not only issues with pay practices but it’s usually the Pandora’s Box for an auditor. How
often do you think your employees actually work a standard day, like 8am – 5pm every single day? There are days when they will come in early or late, take a longer lunch, or leave early or late. There are days when employees might check email at home or attend a conference or an event on behalf of the company. Are all of those times being recorded accurately? That’s what an auditor from the Department of Labor is going to be looking for. They won’t believe you when you say that everyone works a standard day from 8am – 5pm. The onus is on you to defend your time sheets. Can you do that easily? No way! Saying that “Time keeping is really hard” isn’t an excuse that’s going to work for you. Believe me. I’ve lived through this before. Here are some ideas on time keeping from another of my blog posts: Your $250,000 problem
- Let’s tackle one of the toughest issues with pay compliance – people eating lunch or snacks at their desks during unpaid lunch or breaks. It’s really, really difficult to regulate this in your company unless you have a designated warden patrolling people’s work areas. And if that’s your culture then have at it! But if you’re like most employers you are not encouraging people telling on each other for being dedicated. And that’s what we are typically talking about here. People who work through unpaid breaks are doing so because they are either dedicated to their employer or it means something to them to get their work done and get it done well. You don’t want to turn that off! And you don’t have to if you decide to pay people when they work through their lunch or breaks. What if you modified your lunch and break schedule to read something like
“We believe that people need breaks throughout their day. You need to walk away from your work space for at least 30 minutes for lunch and at least 10 minutes in the morning or the afternoon. Because we believe in this for your mental and physical health, you cannot work during that time and you will not be paid for that time. We would like it if you took even more time as an unpaid break – up to 60 minutes at lunch and 10 minutes in the morning and the afternoon. But we understand if you feel like you need to get projects done or handle customer issues.”
The penalties are real for noncompliance. Here’s a recent example in Ohio where the courts decided that because the employee self-identified her time in great detail but submitted only 40 hours per week AND there was no manager oversight to make corrections, she was paid only straight time for hours. Well she figured out she was likely eligible for overtime pay since her hiring in 2010 so she filed a claim for back wages. Guess what? She won. The court went on to say that the employer had the responsibility for reviewing the time sheets, making changes as necessary and ensuring people are paid for all the hours they work. Further, the employer has to plan for overtime costs in the annual budget of the business.
You have no more excuses. It’s time to get into compliance. Let’s talk about how you can get there!