Days before the new FLSA policy was to be implemented, a U.S. District Court Judge issued a temporary injunction blocking implementation. It is not known at this point when the new overtime policy will go into effect.
However, it’s always good business practice to have a consistent and reliable procedure for time tracking. Tsheets is a great program for tracking time accurately so you can better understand your payroll costs and profitability. Read the blog below to learn more.
Urgent memo to business owners: Unless you want to risk a lawsuit, make sure you're keeping precise employee time records when the new Fair Labor Standards Act (FLSA) overtime regulations take effect on Dec. 1, 2016.In this article, I'll explain why it's so important to keep accurate timesheets in light of the new rules.
It's About Time
The new FLSA regulations are intended to modernize overtime pay rules for salaried employees — rules that haven't changed much in 40 years. But in the process, these regulations put the onus on employers not only to more accurately classify their employees as either salaried or hourly, but also to document their employees' hours. Because if you have salaried employees who make less than $47,476 a year, you're now required to pay them overtime if they exceed 40 hours in a week (or, in some states, eight hours in a day).
If you prefer to restrict your salaried employees who fall short of the new standard to 40 hours/week rather than pay overtime, you'd better establish strict guidelines for documenting their hours. That includes spelling out such details as whether checking company-related email or news items on weekends constitutes "work time."
So Who's Counting? It Could Be Your Employees
According to TSheets (developers of a cloud-based time-tracking app), 62% of small businesses with hourly employees use either paper timesheets or Excel to track their workers' time. That might be better than nothing, but not by much.
Besides being overly susceptible to human error, any system that depends on manual input is subject to abuse. It basically relies on the honor system — which works only until someone decides not to honor it.
In court, the burden falls on the employer to produce thorough documentation. If an employee can prove any inconsistency or inaccuracy in your timesheets, it calls the reliability of your recordkeeping into question. And that, in turn, could lead a court to rule in the employee's favor.
Easier Said Than Done
So how do you produce ironclad timesheets? There are several options, but the key element is accuracy. For example, if you're still using paper timesheets, you could review them with your employees each week and have them sign off.
However, that can add up to a lot of extra work and a huge stack of paper to keep track of. Some small businesses choose to outsource the job to a payroll company. Others prefer to have an independent, outside auditor review their records.
A growing number of employers are implementing automated time-tracking systems. TSheets, whose app provides automated time tracking and scheduling with QuickBooks integration, is one such option.
Really, it's up to you. "From a legal perspective," Maria O. Hart of Parsons, Behle & Latimer told TSheets, "all I look for is that a company has a consistent way to track hours."
So the choice is yours. But you just have to make it by Dec. 1.