According to the Federal Judicial Center (“the research and education agency of the federal judicial system”), the number of federal wage and hour lawsuits filed has increased in each of the past five years. Experts are expecting this year to set a new record.
According to Noah Finkel, a partner with law firm Seyfarth Shaw, these increases represent a trend that appears to be here to stay.
Finkel says most wage and hour lawsuits fall into these categories:
- Salaried workers who have been classified as exempt, but who believe their job should be considered non-exempt (i.e. they should be eligible for overtime pay).
- Hourly workers who feel they’ve been shorted on their overtime pay.
- Restaurant workers who think they should get more money under the FLSA’s tip-credit rules.
As it turns out, though, most employers find one of these three issues much more troubling than any other.
The Most Confusing Issue of All
In fact, according to a survey by BLR.com, as reported in February 2011, 75% of respondents cited the first issue — exempt versus non-exempt classification — as the most confusing wage and hour issue they face.
This really isn’t all that surprising, given the hodgepodge of federal and state regulations that apply to employee classification. On top of that, employers can inadvertently invalidate a worker’s exempt status by taking impermissable deductions from their pay, or even by failing to update job descriptions appropriately.
But if you get it wrong, you could be liable for a lot of money in back wages and penalties.
Time Tracking Protects Your Business
Some employers mistakenly believe they can’t track time for exempt employees without jeopardizing their exempt status. Actually, as long as you don’t use the time you record to calculate their pay, you can track exempt employees’ time. (Even the U.S. Department of Labor says so!)
Not only can you track their time, I’m here to tell you that you definitely should track their time. And that’s not just because I work for a time and attendance company.
Here’s the deal: let’s say a disgruntled employee files a lawsuit, claiming they were incorrectly classified as exempt — and they win. All of a sudden, you’re on the hook for paying this person overtime for all those extra hours they put in when you thought they were exempt. It’s even worse if they managed to make a class action lawsuit out of it.
If you don’t have accurate records of the time worked, the court can decide to use an employee’s own records in place of yours for calculating overtime. So if the worker has a personal calendar or diary (or if they’ve been using the Department of Labor’s own app for recording time) and the hours they’ve recorded there seem reasonable based on the testimony at trial, the court may decide to take the employee’s word for how much they worked.
Keep in mind, this is an employee (or, perhaps by now, ex-employee) who is disgruntled to begin with. They’re certainly not going to under-estimate how much time they worked.
It’s bad enough when you have to pay back wages, fines and lawyers’ fees. Imagine how it would feel to find yourself being assessed for hours you know aren’t accurate — but being unable to prove it! To protect yourself against paying for overtime that wasn’t worked, you need accurate time records for all employees.
Help is at Hand
Fortunately, Acroprint offers a complete selection of time tracking products, including everything from a full line of traditional punch clocks to our sophisticated cloud-based workforce management service, AcroTime. Check ’em out — you’re sure to find a solution that works with your environment and fits easily into your business operations. Visit our online store today for more information or to place an order. Every day you don’t track your employees’ time is a day your business is at risk.