Working time according to the Fair Labor Standards Act (FLSA)
You should be tracking your team’s time to understand how much time is spent on tasks and projects and be able to balance workloads, but also to comply with FLSA’s timekeeping requirements.
Not complying with FLSA’s timekeeping rules can land your business in legal trouble. Non-compliance can be penalized by up to $1,000 per violation, plus any backpay, liquidated damages, and attorney fees owed.
Keep on reading to learn what you need to do to stay compliant with FLSA timekeeping regulations.
What is the FLSA working time regulation?
The Fair Labor Standards Act (FLSA) establishes regulations for minimum wage, overtime pay, youth employment standards, and record-keeping for employers in the private sector as well as for federal, state, and local governments.
To be compliant with FLSA’s timekeeping rules, businesses need to keep employee and time records and make these available for inspection by representatives of the U.S. Department of Labor Wage and Hour Division.
Penalties for FLSA non-compliance
While the FLSA doesn’t penalize businesses for timekeeping issues specifically, not recording employee's work hours accurately can lead to non-compliance when it comes to paying employees for overtime.
Non-compliance with FLSA’s overtime regulations can be very costly. An employee who hasn’t been paid for overtime worked can sue the company and be awarded one of the following:
Backpay – The total amount of money the company owes an employee for overtime worked.
Liquidated damages – Employees who are awarded liquidated damages receive double the amount of backpay they’re owed.
Reasonable attorney fees – FLSA allows for plaintiffs also to recover attorney fees.
Exempt vs. non-exempt employees
Some types of employees are exempt from FLSA rules. Whether an employee is considered exempt or non-exempt depends on the type of work they do, how much they’re paid, and how they’re paid.
Employees with executive job duties (such as supervising two or more employees or having the ability to hire or fire employees) are considered exempt. The same is true for those performing professionally exempt work, such as lawyers, dentists, doctors, and teachers.
Employees with administrative duties (such as office work directly related to management or the employer’s business operations) are also considered exempt.
Salaried employees are exempt as well. Employees paid less than $23,600 per year, as well as those paid on an hourly basis, are considered non-exempt.
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