Why it is important to have accurate time records!

by Michael Haberman on March 29, 2016 · 3 comments


It is time to rethink how well and how accurately you track employees' time.

It is time to rethink how well and how accurately you track employees’ time.

Continuing with the theme that I established yesterday, poor HR practices, today I want to talk about the importance of keeping accurate time records. Supposedly we all know that the Fair Labor Standards Act (FLSA) requires accurate time records for non-exempt employees. That is the basis on which we determine how much they are to be paid. That seems pretty straight forward but you would be surprised how often that is not done, especially the accuracy part. As a result of a recent case it has taken on renewed emphasis and with the coming change in the FLSA that will add over 10 million new non-exempt employees employers MUST pay attention to time records.

Tyson Foods

In the Tyson Foods case, as summarized by Salvador Simao of FordHarrison, the issue actually involved a “donning and doffing” issue. The workers claimed they were not being paid for changing in to, and out of, protective clothing. (See Small Business Friday: What the Heck is “Doffing?”) Apparently Tyson was not able to produce accurate records to assist the court in determining if the employees were owed money for time spent putting on uniforms. To overcome this lack of information the attorneys for the employees hired a time expert to determine what had occurred. The attorneys defending the company said that the samples used were inaccurate and should not be used to certify a class of employees. The court did not agree.

Oops

According to Simao:

“The Court held that when employers do not possess accurate records, employees are free to use representative samples to certify classes. The burden then shifts to the employer to present, on an individual employee basis, evidence demonstrating why it would be unreasonable to include each individual employee as a member of the class.”

There were other issues involved in this case, so the outcome of how much is to be paid to the employees in the class action suit is yet unclear. However, it is very clear that the company suffered due to its lack of accurate time records. I offered some advice on the importance of accurate time records in Pay Attention Managers: You have to track time ACTUALLY WORKED!

Impending change in the FLSA

One of the reasons it is important to pay attention to this is that in about 90 days a very large number of employees who have not had accurate time records kept on them are set to become non-exempt employees when the minimum salary level to be an exempt employee is raised to $50,440. The employees who will fall into this new range are making pretty high hourly figures. Paying them overtime will be expensive. Making mistakes on their time and having to pay overtime and penalties will be even more expensive.

This court case has given the government and plaintiffs’ attorneys permission to fill in the missing time gaps. When that occurs due to lack of your accurate timekeeping it will not be to your benefit.

 

Photo credit: Stuart Miles


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{ 3 comments… read them below or add one }

Debra Healy March 29, 2016 at 9:55 am

H, Michael –

Although it isn’t required, tracking the actual hours worked by exempt employees can be important when employers need to determine FMLA eligibility and eligibility for benefits such as short term disability. Just a thought.

Thanks!
Debra

Reply

Michael Haberman March 29, 2016 at 11:53 am

Agreed Debra! Many people think that tracking the time of exempt employees ruins their exemption. Nothing could be further from the truth. How else to you track vacation time taken? What ruins the exemption is if you pay people based on that time worked, as in a week where someone only works 30 hours and you cut their salary to reflect that.

Thanks for the comment.

Reply

Opia - Rekruttering af studerende June 3, 2016 at 11:43 am

I would say that having accurate time records depend on the firm. If it is entrepreneural and only done by founders and employees who only care about goals of the firm, hours do not mean so much.

Reply

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