Posted on February 5, 2014

5 Tips for Reducing Wage and Hour Risk

Since September 2011, the Wage and Hour Division of the Department of Labor has collected millions of dollars in back wages resulting from violations under the Fair Labor Standards Act (FLSA). Could your business be next? How prepared are you for an investigation? In a recent webinar, labor and employment lawyer Seth Briskin provided tips to help you stay compliant with federal and state laws.

1. Audit your policies and practices

It’s crucial that your business take compliance seriously, from the C-suite to entry-level employees. Management must create, communicate and enforce policy, and employees must understand that following those policies is not negotiable. Here are a few best practices:

* Prohibit off-the-clock work. More and more courts are awarding back pay for time employees were suffered to work through meal periods or by checking e-mail and taking phone calls during non-work hours.
* Demand accurate timekeeping practices. This sounds simple, but it has to be reinforced. A clear policy should be stated in your handbook, and supervisors must be expected to oversee this.
* Make sure to calculate overtime properly. For example, non-discretionary bonuses and room and board have to be treated as wages when businesses calculate OT.

2. Verify your employee classifications

Classifying employees as exempt, non-exempt or independent contractors is one of the biggest pitfalls employers face. Remember: a job title means nothing. The classification is based on what an employee actually does every day. The best starting point is an accurate job description, which might be created only by literally spending several days with an employee to see what his or her daily work truly comprises.

3. Improve your record-keeping practices

Accurate, detailed and supervisor-reviewed timecards are a must. Whether you use thumb scanners, punch clocks or a web-based system, the law requires you to have accurate time records. Those records are your best defense against a lawsuit or DOL audit.

4. Provide wage and hour training for HR, supervisors and employees

This is essential! Supervisors can be an employer’s worst enemy if they’re not properly upholding wage and hour law and policy. You and your business are legally bound to the decisions your supervisors make every day on the job. Thus, they must know the law—and must be held accountable for following it.

5. Create an open-door complaint reporting system

If something is wrong, you want to know about it—and well before the DOL does. The minute you find a problem and fix it, the clock is in your favor because of statutes of limitations on DOL fines and penalties. The key to finding the truth is creating a system for employees to report issues without fear of retaliation from supervisors or upper management.

To hear more from Seth Briskin, watch his recent webinar.

Paycor provides a number of solutions that help businesses stay compliant with labor laws, including:

* Time and Attendance allows you to view and change employees’ schedules and generate custom reports to track hours worked and manage labor costs.
* The HR Support Center offers forms and templates for job descriptions, policies and employee handbooks so you never have to re-invent the wheel.
* Paycor’s HR application provides tools for training administration, document archiving and employee communication through a secure portal.

Contact Paycor to learn more about how we can help keep your organization out of hot water.