A critical part of the Fair Labor Standards Act (FLSA) is making sure employees are classified and paid correctly. Does your organization have a current Time Reporting Policy that accomplishes this? Such a policy is easily as important as other standard company policies like your Leave of Absence, Code of Conduct, Benefits, or Communications policies. If you do not have one, it's a good idea to draft a written policy that clearly and thoroughly explains how and when staff should track their time. This will a likely apply to both exempt and non-exempt employees, but the application may be slightly different. Key elements that should be included in this policy include:
Glossary of Terms - Employees and managers/supervisors should use and understand the definitions of terms in the same way. Important terms to be defined include 'work hour', 'authorized work hours', 'work day', 'work week', 'overtime', 'exempt', and 'non-exempt'. The meanings of these terms can vary from company to company, and cutting down on the confusion early on can prevent a good deal of miscommunication and resulting errors.
Procedures – Don’t just assume employees know how to log their time. When employees are hired, make sure this training is part of the on-boarding process. It also never hurts to offer refreshers every so often. Items to cover in this area might include what should be entered on a time sheet (e.g. hours worked, project codes, department codes, labor distribution codes, and time-off (e.g. vacation, sick, holiday, or jury duty)) and when and how time sheets get submitted.
Responsibilities – There are shared responsibilities, obligations, and deadlines that must be met by employees, managers, and payroll administrators to make time tracking and reporting successful. Employees should be responsible for submitting accurate and time sheets promptly and with all required information. Managers are responsible for making sure information submitted is correct and true as well as approving time sheets and passing them on to payroll. Finally, payroll must ensure that employees are paid appropriate hours and wages based on federal, state, and local requirements.
Enforcement – Responsibility requires enforcement to make sure that each person in the chain is doing her/his part in the process. Enforcement helps assure that actions are consistent and ongoing.
There are still many of questions around the very complicated issue of exempt verses non-exempt employee classifications and how employees are paid. We published a blog post in July of this year entitled Exempt or Non-Exempt? That is the Question, which outlined the difference between the two classifications. This just barely scratches the surface of all the regulations surrounding this topic, and we recognize that employers may need additional guidance in this area. As part of our monthly series, we are offering the following, free one-hour webinar to help our clients and friends better understand the processes around paying workers and what important policies to have in place:
Wage & Hour Done Right
Wednesday, December 19th at 11:00am PST
When registering for the session, please ensure that you enter ‘Bennett/Porter & Associates’ in the registration field that reads “Please provide the name of the company that referred you to this webinar.”
People Savvy HCM is designed to automatically administer time tracking policies, from very simple versions to the most complicated ones. Contact us today if you would like to find out how to automate your processes and get away from spreadsheets and paper timecards.