When it comes to compliance with labor laws, the government does not mess around. Did you know that violations of the minimum wage or overtime pay can result in civil penalties exceeding $1,000 or that penalties for non-compliance of youth labor laws can exceed $10,000?
As an employer, it is your responsibility to know and comply with the labor laws. As with taxes and other laws, ignorance of the law is not a defense against non-compliance.
- What is the FLSA and Why do I Need to Care
The Fair labor Standards Act (FLSA) Recordkeeping (29CFR Part 516) specifies the minimum wage, overtime pay requirements and youth employment standards. Failure to comply with the regulations set forth by the FLSA will result in penalties, fines and possibly imprisonment. Good accurate record keeping is key to showing compliance.
- Collect All Required Information
Employers must maintain records for at least 14 key pieces of data for an employee. Including:
- Employers full name and social security number
- Complete Address
- Birth date if younger than 19
- Sex and occupation
- Time and day of week when employee’s work week begins
- Total hours worked each week
- Basis on which employee’s wages are paid (e.g., $9 per hour, $440/per week, piecework)
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the work week
- All additions or deductions from employee’s wages
- Total wages paid each pay period
- Date of payment and pay period covered by the payment
- Record retention is Important
The employer must maintain key records for a minimum length of time. The table below shows the length of time these records must be maintained.
||Min. Length of Record Retention
|Payroll Records, Collective Bargaining Agreements
|Records on how wage compensation is calculated (time cards, piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
- Easy and Quick Access to Records is Critical
Records must be kept and maintained at place of employment or in a central records office and be readily available for inspection. An inspector may request copies of records or require confirmation of computations.
- Employers Have Flexibility on Timekeeping System
Employers are not restricted to any one system or method of timekeeping, but must have a timekeeping plan in place that is acceptable and can be proven to be complete and accurate.
Having information readily accessible, easy to sort, find, and produce on-demand demonstrates to an inspector or auditor that you are organized and have a system and procedures in place for the required documentation. Most importantly, it allows you to prove compliance with the labor laws. The more quickly you can satisfy the auditor, the more quickly you can get back to activities essential to managing and growing your business.
What system are using? sign up for a 30 day Free Trial for our automated timekeeping system or learn more about our automated timekeeping system.