Law requires that US businesses keep track of all non-exempt workers and maintain these records for a minimum of two years. Non-compliance could lead to expensive wage and hours lawsuits.
Undoubtedly, it is one reason why many businesses are turning towards time clock software to help comply with the FLSA classification rules and regulations. Read the article to understand how the latest in software technology is assisting employers.
What is the Fair Labor Standards Act?
Before explaining how time clock software helps your company in FLSA classification and compliance, let’s define what FLSA is and how it affects different categories of workers, mostly the exempt and the non-exempt ones.
The Fair Labor Standards Act (FLSA) was set up to protect workers against unfair work regulations and payment practices. It is a set of regulations governing the minimum wage, limitations on child labor, overtime payment, etc. Both full and part-time employees in private and federal, state, and local governments, come under its purview.
FLSA stipulates that employees may use a timekeeping method they want as long as the chosen method is accurate.
Difference Between Non-exempt and Exempt Employees?
Generally, employees are classified into exempt and non-exempt ones. The difference being that “exempt” refers to the group of employees exempt from getting overtime pay. Exempt employees may be paid on a salary basis rather than on the usual hourly pay.
The FLSA regulations state that employers pay minimum wage and overtime pay unless they fall into the exemption category. The FLSA regulation requires the employer to pay overtime payment to non-exempt employees, and payment should be at least half of the employee’s regular hourly rate.
What Is An Employee Time Clock?
Any device that records the start, the end times of an hourly employee in an organization is an employee time clock. They could be punch card clocks, time station software, digital clock, fingerprint clocks, or hard punch clocks. These devices automatically integrate with the payroll software system and help in calculating the total payment for each employee based on their hourly wage and the time worked. The efficiency of these time clock software leads to better FLSA compliance.
The advantages of using employee time clock software are numerous. Workers using it have an accurate idea of when their day starts and finishes. Employers will know when their organization members are due for break or lunch and due to return.
The advantage being that no employee will be asked to work more than they are supposed to, and every member of the organization would be working when they should. The implementation of a time-clock across the organization will lead to increased productivity and efficiency levels.
How Does Time Clock Software Help In FLSA Compliance?
It is crucial for a company compliant with FLSA classification to record how many hours the employees have worked. Even though the FLSA does not mention a preferred timekeeping method, it is ideal that the method used is accurate and complete.
Accurate and precise timekeeping records require daily recording of employees’ arrival at work, the time they took a break, and the time they left the job. From all this information, the total hours the employee has worked is calculated.
A time clock software easily tracks the time each of your employees worked during any given day. You will also be able to see the total amount of hours they worked. It allows you to log time for FLSA compliance easily.
Since FLSA is strict about overtime work, the time clock software can be customized to comply with the specific office environment, along with local and state laws. It enables the employer to differentiate between regular working hours and overtime hours.
Another requirement of FLSA is to record the exact break time, and time clock software can do that for you. With a time-clock software, you will see how long each employee was on break during each day.
In addition to timekeeping, the latest time-clock software helps in simplifying payroll calculation as well. By entering the pay rates for regular and overtime hours for each employee, you can get a report on the working hours and the amount to be paid. These reports come with the additional benefit of simplifying the accounting works.
It is a necessity for all US businesses to comply with FLSA regulations. And tracking employee regular and overtime work timings is one important regulation mandated by FLSA. Although the choice of timekeeping is up to you, it is always better to go with the latest time clock software that gives numerous advantages on many fronts, as explained above.