Fair Labor Standards Act Regulations Must Receive Appropriate Attention (Part II)

Bart Castle SPHR
March 31, 2008 — 1,866 views  
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In this second installment of a series of items discussing the Fair Labor Standard Act, we will look at the second of six key areas which should receive attention in order to reduce the likelihood a wage and hour challenge (or worse) will arise. This second installment is a discussion of the time-keeping practices of an organization. On its face, the area seems so pedestrian as to need little, if any discussion. “Bart, what business wouldn’t believe it needs to accurately record the time worked by its employees? If nothing else wouldn’t an organization want to be able to track its costs accurately?” The short answer to both questions is, “Yes.” Despite the seemingly obvious nature of the reasons to keep time accurately, wage and hour disputes, including disputes regarding proper payment of overtime are one of the fastest growing areas of employment-related litigation. To reduce the likelihood of a wage and hour dispute that has its catalyst event in the organization’s time keeping practices examine the items presented below carefully. 1. When and how was the time keeping process explained to employees? An effective explanation of the time keeping system should be a part of Orientation. People’s pay is important. Few things will turn a newly hired employee south as quickly as an incorrect first check or two. Did the presentation of the process use primarily statements, or did it include asking employees to explain how the process worked after the process was presented to them? Adults do not like to feel embarrassed or to look foolish. As a result, if most adults believe they have a reasonably good handle on information presented to them they will not ask questions, or if they are asked a yes/no question regarding their understanding they will reply with “Yes,” to reduce the likelihood they will be perceived as slow. 2. Did the explanation of the time keeping process include behavioral examples of key potential problems? Discussion of the time keeping process should include conversation regarding not feeling pressured to work off the clock, reviewing and individually approving time records before they are submitted for processing, notifying supervision that a time record is incorrect and needs revision, properly recording overtime and any special time keeping situations normally faced in the organization (e.g. call-outs, on-call assignments, various types of premium pay, etc.). 3. Does the method used to record time regularly produce errors? Time keeping errors occur from time to time. However, if employees’ paychecks are regularly incorrect as a result of some miscue in the time keeping process the process needs to be reexamined. While change may not be fun, continuing to pay employees incorrectly rather than revising error-producing processes is an invitation to a wage and hour challenge. 4. Is there a clear, effective method for reporting time keeping errors? Do employees know how and who to report a time keeping error to and does that report produce any results. Such results should include: getting the employee’s pay corrected (for the time keeping period in question), identifying how the error occurred and revising any process problem which has produced the problem (especially if the problem is reoccurring). 5. Are there organization leaders, areas or both where time keeping errors are regularly occurring? In virtually every industry and organization there are leaders who take administrative matters lightly believe them to be someone else’s responsibility. Failing to take the time keeping process seriously by a leader, division, etc., is an invitation to both potential challenges and diminished productivity resulting from poor morale. 6. Are there employees who regularly create time keeping errors through their ineffective administration of the time keeping process? In some instances, time keeping process challenges result from employees choosing not to follow time keeping process procedures. Once effective training has occurred, choosing not to utilize the proper time keeping process should be dealt with in the same manner as not reporting for duty, choosing to disregard work directives, or other work place expectations with performance management conversation. Employees should be paid for time they report, even if late, they worked. However, the same employee should not be allowed to operate outside expectations in this area any more than he or she would be allowed to operate outside any other work area without performance management (discipline). Wage and hour challenges are increasingly common. Time consuming, potentially expensive and hard on morale (even if invalid) such challenges can be largely avoided – even in 2008, if an employer is diligent in a number of key areas. Wage and hour challenges are hard to raise in an organization where the time keeping process has been well thought out, is effectively administered and, in those rare instances where an error occurs, investigation and correction action taken (if necessary).

Bart Castle SPHR

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Bart W. Castle, of the Sapio Group, LP, has been involved in virtually all facets of human resource management over the past two decades.