As many HR professionals already know – it can become easy to lose track of state compliance laws that go beyond federal standards. Companies can fall into major problems if they fail to pay their employees for all compensable work time.
Within the last two years, wage and hour class action settlement values have tripled. This makes it crucial to ensure that your company is compliant with these laws – especially if your company operates in multiple states.
Most states mirror the federal standard when it comes to wage and hour laws. However, some states such as California, have intricate details and standards within their specific laws. With every state having different requirements, is important to keep up to date and become familiar with the law in the states your company operates in.
The abundance of state and federal laws to keep track of can create a high risk of error. We’ve outlined the four most common wage and hour pitfalls and how to avoid them.
1. Not Paying Employees for All “Compensable Time”
One major rule of thumb — if you know an employee is working, you must pay them for it. It is important to remember that even voluntary work is compensable.
An efficient way to keep track of all your employees compensable time is through a biometric time clock. These clocks can accurately keep track of the amount of times an employee clocks in and out through fingerprint or facial recognition. Implementing a biometric clock can improve workforce productivity and more importantly guard against compensation and fraud claims that revolve around lack of pay.
2. Not Providing Pay Stubs When Required
While federal law requires employers keep accurate records of hours worked and wages paid, there is no federal law requiring employers to provide employees with pay stubs – but that isn’t the case on the state level.
Having a strong time and attendance system in place can eliminate the extra worry of dealing with pay stubs. A strong system should include employee self-service capabilities, which can provide the ability to view time sheets and print pay stubs right from the time clock. This can slash printing and distribution costs in half and eliminate the worry of forgetting to provide pay stubs to your employees.
3. Not Providing Meals and Rest Breaks as Required
One of the most overlooked wage and hour pitfall revolves around meal and rest breaks. While federal laws do not require meal breaks, it does require that employers who offer meal breaks of less than 30 minutes pay for that break time. However, the federal law does not require rest breaks, it does require that employers who offer rest breaks of less than 20 minutes pay for that break time.
A robust time clock should have the capability to give a meal break reminder to prevent employees from skipping a required meal break. When this feature is enabled, any employee who did not take a meal break the previous day will receive a notification upon clock-in to take their meal break. This feature also prevents employees from clocking back in from their meal break before the allotted time has passed.
4. Assuming Work is “Off the Clock” … When It’s Not
Many problems can arise when it comes to employers assuming work is “off the clock”. Pre-shift and post-shift work is compensable if it involves the employee performing his/her “principle activity”. These can include pre-shift meetings, work during meal periods, taking work home, and after-hour calls.
You can eliminate the guess work when it comes to assuming work is on or off the clock by incorporating a strong time collection method. With a new method, you can say goodbye to time rounding, buddy punching and manual errors. Some of these options can include, biometric time clocks, mobile time tracking with GPS, telephone time tracking (IVR) and online time tracking, which can be mixed and matched per the needs of your business.
EPAY Systems Human Capital Management
EPAY includes an advanced time and labor management solution that makes it easy to track employee worktime precisely, even tricky areas like overtime and meal breaks. Plus, its unified with our robust payroll engine, ensuing employees are paid correctly for their work time.
Want help avoiding wage and hour pitfalls? Learn more about how EPAY Systems’ time and attendance system can keep accurate track of your employees – request a demo today.
If you want to avoid fees, fines and courtrooms—and what employer doesn’t? —download the digital guide to learn 10 wage and hour pitfalls, so you can take steps to steer clear.