FLSA Lawsuits have Doubled: Is Your Company at Risk?

Accurately Tracking Employee Overtime is Key to Compliance

In organizations across America, compliance with the Fair Labor Standards Act (FLSA), especially as it relates to overtime pay, is increasingly crucial. It is alarming to consider that federal lawsuits alleging violations of FLSA have recently more than doubled nationwide. An increased emphasis on overtime -- along with nonpayment for the work -- is alleged to be a big part of the problem.

The burden of proof is 100% on the employer to comply with FLSA regulations. Many unclassified employee groups have filed, and won, suits against organizations for underpayment of overtime.

Retroactive payments of twice the amount of overtime owed, along with legal fees, put pressure on a business.

What Is the Fair Labor Standards Act?

The Fair Labor Standards Act advocates for workers by establishing minimum-wage, overtime, and child labor standards in the United States. These standards usually apply only to hourly employees, but some salaried employees also are covered under FLSA.

In fact, the only true measure of whether or not employees are covered by the FLSA is their status: exempt or nonexempt, as determined by the employee’s primary duties.

What Does the FLSA Say About Overtime?

According to the U.S. Fair Labor Standards Act, overtime must be paid at 1.5 times the employee’s average pay rate after the employee has worked 40 hours. Because some employees work at different rates throughout the week, it can be complicated to calculate a fair overtime wage.

Improved Timekeeping

An important step to FLSA compliance is to adopt timekeeping practices that accurately record employees’ time and overtime. Organizations turn to time recorders and time and attendance software to keep a precise record of the exact minute employees begin and end work. Attendance on Demand is powerful software that can be customized to reflect your time and attendance policies, as well as FLSA regulations for nonexempt employees.

If an employee performs diverse tasks with different pay rates, Attendance on Demand tracks the time spent performing each task and calculates an accurate wage. When an employee passes the 40-hour threshold, time is automatically recorded and paid as overtime.

Industry-leading tools like Attendance on Demand can greatly simplify FLSA-compliant overtime calculation, as well as maintain accurate employee attendance records, for better protection against this type of litigation.

Attendance on Demand records become invaluable legal records of employee attendance and pay.