Have you ever given the go-ahead to hourly employees to work through lunch so they could leave work an hour early for a special occasion? Perhaps you have. You would not be alone.
But know this: Every time you do it, you are breaking the law. Most states have laws requiring specific meal and rest breaks. They require you to record every hour of overtime your hourly employees work. They also require you to document all hours your employees spend on the job.
The U.S. Labor Department reports that over 88% of the cases for a violation of wage-and-hour laws involved miscalculation of hours worked. https://www.dol.gov/agencies/whd/data/charts/fair-labor-standards-act.
If your organization might be part of that 88%, it could land in big legal trouble. The number of wage-and-hour claims under the Fair Labor Standards Act (FLSA) continues, and the number of FLSA class actions remain a threat to employers. In fact, every year federal class-action wage-and-hour claims outnumber all discrimination and workplace-action claims combined. (Op cit.)
Plaintiff lawyers love these cases. Why? These cases mean big paydays for plaintiffs’ attorneys. Wage-and-hour liability is a numbers game. It’s about your company’s data. You either violated wage-and-hour laws or you didn’t. When a plaintiff’s lawyer comes in, it is all about the documentation you have:
“Did you properly pay people for overtime? Yes or no? Were meal and rest breaks being taken properly? Yes or no? Show me the documentation.”
Don’t have the documentation? Now the benefit of the doubt goes to the employee.
Your best bet: Put a compliance program in place right now. Much like harassment laws, consistently training managers about the law and enforcing it can arm you with an affirmative defense should an employee sue your business. Experienced legal counsel can help your business comply.
4 Steps: How to comply with pay laws:
1. Audit your time-keeping and documentation systems so you know the systems are accurate and in compliance with federal and state wage-and-hour laws. Do not under-invest in proper time-keeping and audit policies.
2. Update your HR policies so they reflect federal and state laws. Note: The U.S. Labor Department provides a state-by-state breakdown of minimum rest and meal requirements at dol.gov/whd/state/state.htm.
3. Educate managers and employees with the same fervor you use for harassment training. Explain what you mean by “overtime,” “hours worked” and “off-the-clock work.” Tell managers and employees what to do if they discover an error in their paychecks.
4. Target managers of hourly employees. Because these managers probably are exempt from overtime (i.e., because they receive a salary), the rules are different for them. As a result, these managers probably do not know as much as they should about what’s legal and what’s not when dealing with hourly employees.
Experienced Counsel will know the nuts and bolts of the rules, which can be complex and confusing.