FLSA Compliance: Common Violation #4

FLSA Compliance laws can get tricky.  The laws can be hard to understand, and misunderstanding the laws could cost your business money.  Understanding where you are failing to follow FLSA regulations gives you a chance to fix the violations.  This blog post is not meant as a substitute for legal council.  Always contact legal representation if you have any questions regarding FLSA compliance. Using a mobile resource management solution can make it easier.

Where do most companies go wrong?  The FLSA knows.  The following list was collected by the FLSA and is available for you to download from their site. Click here. 

Common Violation #4 _______________________________________________________________

Banking of overtime hours in the form of comp-time

Problem:  Sometimes it seems easier and less expensive to trade hours worked for comp-time.  However, in some states such as California, this is illegal and could be the basis for an FLSA lawsuit.  So, first and always know the laws in your state.  If  you live in a state where it is legal to trade overtime for comp-time then documentation is the key.  Most states require a signed contract between the employer and employee stating that the employee understands and is willing, to trade overtime for comp-time. 

At this point in the series, I hope you see a theme.  Document, document, document! 

Solution:  If you live in a state where overtime pay cannot be substituted for comp-time, make sure that you are documenting all overtime hours.  Failure to pay the correct overtime wages is cause for FLSA fines and possible litigation.  Automating your time and attendance workflow with a software solution that has an overtime feature is highly recommended.  The ability to see overtime hours worked and get field approval keeps the office informed of exactly how many hours employees are working in the field.  The field approval provides employees with up to the minute verification of how much they have worked while providing employees with the opportunity to discuss any discrepancies before they become problems. 

If it you live in a state where you can use comp-time, make sure you have signed documentation, and it is easily assessable.  In a previous blog, we cited a study done for The Paperless Project.  It stated that large organizations lose a document every 12 seconds.   The best way to combat lost or misplaced paperwork is to not use paper.  Instead use digital forms and store them on your computer in a file attached to your employee file or project file.  It is easily assessable this way and harder to misplace.   FormsXPress from AboutTime makes this process very easy.  The agreement can be filled out in the field and signed by both the foreman and the employee, even on a weekly basis.     If you don’t have a program like FormsXPress available make sure documents are signed, scanned and attached to each employee's file.  

FLSA Common Violation #3

FLSA Compliance laws can get tricky.  The laws can be hard to understand, and misunderstanding the laws could cost your business money.  Understanding where you are failing to follow FLSA regulations gives you a chance to fix the violations. This blog post is not meant as a substitute for legal council.  Always contact legal representation if you have any questions regarding FLSA compliance. Using a mobile resource management solution can make it easier.

Where do most companies go wrong?  The FLSA knows.  The following list was collected by the FLSA and is available for you to download from their site. Click here.    

Common Violation #3                                                                                                                  

Failure to compensate for meal breaks where an employee is not completely relieved of all duties to enjoy uninterrupted time for a meal.

Problem:
Laws vary in every state regarding how often breaks must be given. However, the FLSA requires that a break must be uninterrupted.  If an employee is required to work through the break, then it isn’t an actual break, and they should be compensated for their time.

Solution:
Tracking employee breaks is the easy part.  Tracking breaks requires implementing a work-flow that requires a Clock OUT at the beginning of a break and a Clock IN at the end of a break. However you do it, documenting that your employees were given a break is the first step to protecting your business from FLSA litigation.

Using AboutTime’s task feature employees can clock IN to a task labeled “Lunch” or “Break” and then Clock IN to a work task code when they begin working again.  
The tricky part is tracking whether or not your employees had an uninterrupted break.   Training your managers on the laws is a good first step. Make sure they understand that when an employee has clocked OUT for a break they shouldn’t be asked to perform work tasks.  As we stated before, documentation is what protects your business from FLSA litigation.

AboutTime has an Employee Feedback feature that provides the documentation needed to protect yourself from claims associated with this law.  Simply ask each employee at clock OUT if they took an uninterrupted break.  If the answer is Yes then you have successfully documented your compliance.  If the answer is NO, you can address the situation before it becomes a lawsuit.

See Common Violation #1
See Common Violation #2

The FLSA Knows What Mistakes Most Companies Make: Common Violation #2 and how to avoid it.

FLSA Compliance laws can get tricky.  The laws can be hard to understand, and misunderstanding the laws could cost your business money.  Understanding where you are failing to follow FLSA regulations gives you a chance to fix the violations.  This blog post is not meant as a substitute for legal council.  Always contact legal representation if you have any questions regarding FLSA compliance. Using a mobile resource management solution can make it easier.

Where do most companies go wrong?  The FLSA knows.  The following list was collected by the FLSA and is available for you to download from their site. Click here.   

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Common Violation #2

Short hours by using terms such as “Down Time” or “Rain Delay.”  

Problem:

When managing a large project the proverb “change is the only constant” is a very true statement.   Rain delays do happen, and tools break causing down time.  The problem lies in not documenting when, where and what happened.  Without this type of information, your business could be left defenseless if an employee feels that they have been unjustly shorted hours.  

Solution:

First, know the laws in your state.  Your state may require you to pay employees for a predetermined amount of time just for showing up to work.  If that is the case, you will need to adjust time records accordingly.  Second, make sure that you have adequate documentation for why an employee’s shift was shortened.  Third,  make sure that your employees know why their hours are being shortened for the shift and have proof that the situation was explained to them. 

Using a mobile resource management software can provide adequate documentation and store the information in case it is needed as proof in a future FLSA audit.   AboutTime’s software has a weather feature that automatically records the weather throughout the day.  This report is part of the daily report and is attached to the project.  Verifying that there actually was a rain delay is simple and takes only a few seconds.  

Communicating with field employees can be difficult but there are a couple of options that can make the process easier.  AboutTime’s Employee Feedback feature can ask any question on clock OUT.  If there is a delay of some sort, the question could be something along the lines of “do you understand why your shift was shortened today?” If the employee clicks yes then they have acknowledged that they understand. If they click no, the employee can be contacted to discuss the situation, resolving the issue before it becomes a lawsuit.  A second option would be to use the FormsXPress Feature and approval screen to fill out a form and have each employee sign the touch screen of their device upon clock out. 

Did you miss the last post?  Common Violation #1

For more information on AboutTime Mobile Resource Management Click HERE! 

The FLSA Knows What Mistakes Most Companies Make: Common Violation 1 and how to avoid it.

FLSA Compliance laws can get tricky.  The laws can be hard to understand, and misunderstanding the laws could cost your business money.  Understanding where you are failing to follow FLSA regulations gives you a chance to fix the violations. This blog post is not meant as a substitute for legal council.  Always contact legal representation if you have any questions regarding FLSA compliance. 

The FLSA knows where most companies make mistakes.  You should know too so you can avoid them. Where do most companies go wrong?   The following list was collected by the FLSA and is available for you to download from their site. Click here.  

Common Violation #1:  
Failure to record all hours that were actually worked to include time spent before and after the shift.  

Problem: 
Collecting time and attendance data can be an overwhelming task, especially when your business has crews scattered across different job-sites.  Inaccurate hours, unapproved hours, lost time sheets can all contribute to incomplete recording of time and attendance.

Solution:  
Following three steps can protect your business from wage and hour litigation:

1.    No more paper. 
It is easy to misplace paper.  Handwriting can be hard to read. Hand written time cards have to be manually entered into the accounting system.  The more times data entry is involved, the more chances for mistakes.  Instead, use a time clock that records a clock IN and OUT in Real-Time and exports the data to a .csv file that is easily imported or, better yet, integrates with your accounting system.  Integrating time and attendance with your accounting system eliminates lost, unreadable time cards as well as removing extra opportunities for mistakes caused by human error.

2.    Clock IN or OUT includes a GPS stamp.
Location, location, location.  Knowing not only when but where your employees clock IN or OUT gives your business advantage in a wage and hour lawsuit

3.   Add an approval process to your workflow.

On-site approval of employee time and attendance records make it clear that there aren’t any discrepancies.  Whether the approval process takes place daily or weekly it allows discrepancies to be addressed and resolved before the FLSA gets involved, and fines get hefty.

Time and attendance software clocks employees IN and OUT in Real-Time eliminating the end of the week “guessing game” that accompanies filling out a form or paper time cards.   A good software solution will “stamp” each clock IN or OUT with the date, time and GPS location.  Real-time approval from managers and employees confirms at the end of each shift, or week, that the time is accurate.

Investing in a mobile resource management solution with a great time and attendance feature can protect your business from wage and hour litigation.  However, it is important to know the laws in your state and make sure that you are following them.  Ignorance is not an excuse when it comes to wage and hour litigation.

Come back next week to read our  post on the 2nd  most common FLSA violation and learn how to protect your business from litigation.

See how AboutTime can work with your business.

FLSA Lawsuits Increase Over 500%

http://www.gao.gov/products/GAO-14-69 A  Government Accountability Office Report (GAO) reported that FLSA litigation increased by 514 percent since 2012.  Even more disconcerting for    The number 1 FLSA alleged violations, 95% to be exact, were from overtime violations.   Half of the overtime violation involved inaccurate record keeping.  Isn’t it AboutTime to implement a time and attendance solution that will provide accurate record keeping?     

construction business is that the construction industry along with Hotels, manufacturing and service industries, makes up more than half of all FLSA cases.

If you haven’t implemented a system, then it is time to do so.  What constitutes a good Time and attendance system?  What type of system can protect your business from FLSA ligation?  Read here. 

Top 3 Reasons You Need a Time and Attendance System

1. Accurate Payroll
How many different types of materials have you received employee time cards on?  I have heard of time cards that were written on napkins, boxes and even a 2x4 piece of wood.   I might be stepping out on a limb when I say that these time cards were filled out as an afterthought and probably weren't very accurate.  Even when time cards are filled out on actual paper, accuracy can be a problem.  The American Payroll Association reported that mistakes made from manually entering data into your system can cost 1% -8% of your companies gross annual payroll.  A time and attendance system eliminates the need for manual data entry.

AboutTime Technologies has an ROI calculator that will show you just how much your business can save from using a Time and Attendance software.  However, nothing speaks louder than hearing actual customer accounts.  Sue Hefferman from Martin-Zombeck said "I would say we have saved close to $200,000.00 on a job by knowing what our average labor rate was, and the accuracy of the time being imported. We have seen an immeasurable return on  investment with AboutTime

2. Reduce administrative costs
Data entry takes a lot of time.  Some companies even hire a full time data entry person.   Collecting time cards, trying to figure out what the time cards actually say, verifying they are correct and finally entering the data into your accounting system can take a full time staff.  A time and attendance system can cut the time spent doing administrative tasks at least in half.   Brack St. Clair, the warehouse manager and AboutTime Administrator for Trinity Drywall and Plastering,  reported “ Before AboutTime we had one full time employee that just worked on payroll.  AboutTime cut the time spent on payroll processing in half, allowing HR also to do HR duties, and we didn’t have to hire extra resources.


3. FSLS compliance laws
The most important aspect of being compliant is having accurate documentation readily available.   A system,  such as AboutTime, that uses pin-codes, or biometrics along with GPS stamping ensures that the correct time is assigned to the correct employee.  Once the information has been collected it is sent to the office where it is easily imported into accounting, doing away with manual data entry and maintaining the integrity of the data.   With the number of wage and hour lawsuits increasing since 2011 by %115  it is important to make sure your business is following compliance standards, and a time and attendance system is the first step toward meeting that goal.

Time and Attendance Part 2: Keep It Simple

On April 26, 2010 the Division of Workforce Services announced it’s “Plan/Prevent/Protect Strategy" placing compliance entirely on the shoulders of employers. 

1.   Plan:  Employers are required to design a plan and work-flow that demonstrates compliance with federal FLSA laws. 

2.   Prevent: Employers must be able to implement the plan and have the ability to monitor whether or not their employees are following it.

3. Protect: Employers must provide documentation that evaluates the effectiveness of their plan.  

It is up to employers to design, implement and monitor their business compliance plan.   While ultimately, failure or success lies directly with the employers, at some point, the plan that is put in place must be applied and used by employees.   When the success of your company FLSA compliance depends on how effectively your employees follow your business time and attendance plan… SIMPLICITY suddenly becomes a very important concept. 

Originally contractors themselves, Mike Merrill and Ryan Remkis, founding partners of AboutTime Technologies,  understood that their crews were not going to follow any procedure that was too complicated.

 “ We knew that our solution had to be simple. “ stated Ryan.  “One day I was getting cash out of an ATM and it occurred to me… Anyone can get 20 dollars out of an ATM.  The process is just so simple.”

“Right away we started doing research,“ added Mike.  “ We used different ATM’s from different places, counted how many steps it took to complete the transaction, and timed how long a transaction took to complete.   We modeled our software after our research on ATM's.  We figured if someone was able to use an ATM, they could clock IN and OUT using AboutTime. “ 

And sure enough Ryan and Mike were right.  Using mobile devices such as smartphones, laptops, or iPads, with large easy to read buttons, employees can clock IN, choose a location and choose a task in 5 seconds or less.  Simplicity is at the heart of the AboutTime Time and Attendance solution.

Time and Attendance Part 1

A building contractor, working on a job that would take several months, was being paid weekly. Looking at the check he had just received, he approached the owner of the property.

    "Excuse me, but this check is two hundred and fifty dollars less than we had agreed upon," he said.

     "Yes, I know," said the owner. "Last week I overpaid you by two hundred and fifty dollars and you             never complained."

    "I don't mind an occasional mistake," replied the contractor, "but when it starts to be a habit I feel I have to bring it to your attention."

Mistakes will be made when using traditional methods of collecting time and attendance.   You may not
even know that you are making mistakes.  Did you know that over 70% of employers are not in full compliance with the FLSA?  This fact is compounded by the steady rise in wage and hour lawsuits year over year.   The number one wage and hour  litigation claim is "unpaid work time" which is mostly caused by payroll errors.  

Mistake made yesterday or  mistakes made two months ago will eventually catch up and could be the cause of a lawsuit.   The best thing to do to avoid a lawsuit?   That is easy…  Do not have any mistakes!  

Really? How?

When time cards are filled out in the field, by hand, then gathered and sent to the office, and again entered, by hand,  into the payroll system, mistakes will be made.   The implementation of an automated time and attendance solution could minimize mistakes that in turn could avoid future lawsuits.     

A good time and attendance solution had 4 important features.

1. Simplicity:  Simple equals less room for error.  Minimal steps = less room for error.  Less room for error = fewer mistakes.

2. Authentication:  Do you know who clocked in/out and where?  Using smart phone's, iPads, or laptops allow a GPS time stamp to attach to an employee clock in/out.  Assigning each employee a pin code or using biometrics  immediately lets you know who clocked in/out.    Authenticating who clocked in and where has benefits for both the employer, as well as the employee.  It answers any questions about who was where, resolving any issues before they become conflicts. 

3. Verification:  The fewer times information is touched by human hands, the less mistakes there will be.  However, there comes a time when all of the data collected from employees must be verified, and any discrepancies addressed.  

4. Integration:   Data entry often results in a large number of mistakes.    Integrating your time and attendance system with your accounting system eliminates the need to re-enter information.  Skipping this step pollutes your data by allowing room for error.  Keep your data pure by using a time and attendance system that can push and pull critical information without using data entry. 

This is the first of a 5 part series on choosing a time and attendance system.  In the following 4 blogs I will delve a little deeper into each of the 4 important features noted in this article.