Q: "Is there merit to having employees sign their time cards? Is it important to have a certification that the hours shown represent an accurate accounting of time worked? Is there any type of liability if the employee simply uses an automated system of hand or card swipes and never 'approves' their time, either automatically in the computer timekeeping system like ADP or in writing on a printed time sheet? What might be the issue if this does not happen?"
A: Yes, it is a best practice to have employees review and sign their time cards showing hours worked, regardless of whether the employee is signing a handwritten summary or reviewing a summary that is kept by mechanical or electronic means. Employees may file claims for unpaid overtime up to three years after the actual time was worked, and to avoid surprises, most employers ask employees to certify that the hours worked are correct.
Although software that tracks employee hours is very convenient, if it is set to automatically deduct meal or rest breaks, for example, and the employee actually worked through a break, then the employee may have good cause to claim that he or she was underpaid at some future point. For that reason, reasonable steps to ensure that each individual affirms the accuracy of his or her time card are a good idea. — Attorney Nancy Delogu
The bottom line: All tax and wage & hour audits depend on the quality of your records. Bad records will sink you every time. And while it's more important than ever to stay in compliance, it's also more complex.
Got questions? Go ask Alice.
Q. Is it legal to pay a nonexempt employee to work at a company event at a lower hourly rate than what we typically pay her? The event is a conference where staff would be answering questions and giving out information.
A. Yes, you can pay an employee to do a different job at a different pay rate. In fact, it's not uncommon to do so, although it creates some timekeeping and overtime calculation challenges.
Let's say you pay a delivery driver $20 an hour to do that job. You ask him to help at the conference booth and say you'll pay him $10 an hour for this time. If he works 40 hours that week driving and 10 hours at the conference, he's entitled to overtime. How do you calculate that overtime? There are two approaches:
First, you can add the rates together proportionally and find the average rate for overtime purposes:
40 hours x $20 = $800
10 hours x $10 = $100
Total wages $900/50 hours worked = regular rate of $18
0.5 x $18 x 10 = $90 overtime wages owed
Another way to calculate overtime when an employee works at two different rates is to agree with the employee that overtime will be paid based on the rate applicable to the overtime hours worked. Say the employee worked 35 hours at the driving job, then 10 hours at the conference and then a final five hours driving before the end of the week. In that case, five hours of overtime would be calculated on the $10 conference rate, and five hours at the $20 hour driving rate (total of $75 in overtime wages). — Attorney Louis DiLorenzo
It's never been more important for you to track employees' time correctly and keep accurate records of those hours and minutes. On Monday, October 24, join payroll expert Alice Gilman, Esq., the editor of Payroll Legal Alert, for our timely new webinar, Timekeeping & Payroll Recordkeeping: Legal Compliance for 2016.
Q. When our employees come in to work, they spend part of their time getting their equipment running. Do we need to compensate them for that time?
A. Preliminary steps to prepare equipment for work almost certainly count as time worked for nonexempt employees. These are considered principal activities that primarily benefit the employer. A number of different courts have found these preliminary activities compensable:
- Turning on switches for lights and machinery
- Powering up and testing an x-ray machine integral to taking x-rays
- Distributing material to work benches or getting machines ready for operation
Once employees engage in such activities, the workday has started—and under the continuous workday rule, any subsequent walking, waiting or other time generally must be counted as time worked. — Attorney Michael Fox
You'll discover:
- What the DOL and IRS looks for in your time and pay records—and how to minimize the damage (and liability) of your mistakes
- The best practices in tracking time (paper? electronic?) for different types of employees—exempt/nonexempts, telecommuters, etc.
- The one common misstep in correcting employees' time records that will make you a DOL target
How to legally respond when time records are missing, inaccurate or incomplete- How to spot errors in your timekeeping, including the 3 most common causes of unpaid working time and the 2 FLSA safe harbors that can save you
- Which are the vital tax records you must keep (Hint: it's more than just copies of tax forms you've already filed!)
- The legally safe way to track time for exempt employees (Too much or too little gets you in trouble!)
- How to set up a timekeeping system for employees who work at home
- Why keeping track of exempts' quarterly salaries is the key to meeting the new salary-level rules
- Plus, answers to all your own questions about timekeeping and recordkeeping from a payroll superlawyer!
On October 24, let Alice explain in plain English how you can master this core HR responsibility—and keep your organization out of court!
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