Business owners must understand the fundamentals of wage and hour laws that are applicable. The wage and hour division of the Department of Labor collected almost $322 million in back wages from firms last year alone. Nothing will knock a company out of the running more quickly than a fine and possible government lawsuit. As a result, you must make sure that your company is shielded from potential responsibility resulting from wage and hour claims to preserve the investment you made in its founding and growth.
The actions you can take to reduce your responsibility and implement the required safety measures to avert wage and hour claims are listed below. Although a wage and hour attorney is there to help you protect your rights, it is still better to keep such claims at bay.
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Start with a system of recording time for hourly workers
Any organization should start by putting in place a trustworthy system for tracking the number of hours hourly workers put in each day. Employees may be required by some companies to self-report their time at the end of each day or to clock in and out. Ensure a supervisor who can verify the accuracy of these times reviews them. Additionally, it is beneficial to get the worker to verify or sign off on their time each day or week. This can serve as strong evidence if the worker later claims to have worked longer hours than they were compensated for.
Confirm in practice and in writing the actual exemption for exempt workers
An employer may choose not to demand overtime or the minimum wage for specific categories of workers. But simply designating an employee as exempt on paper is insufficient; in reality, the individual’s conduct and regular tasks must align with the relevant exemptions. Stated differently, actions speak louder than words when it comes to designating employees as exempt. If you don’t get this one right, there could be severe consequences.
Make a fixed system for payment
The next stage is to ensure that your company has a precise and dependable method for paying workers for the hours they have worked on schedule. Since transparency is crucial, you might wish to include on each pay stub the total number of hours worked as well as the kind of pay (overtime or normal), making sure that the information matches the time that the employee has verified. Ensure that you pay your staff the right amount and on time every time. It is not appropriate to use paid time off to cover overtime; instead, overtime compensation must be given concurrently with normal compensation.
Have accurate job descriptions
Make sure you take the time to ascertain the precise tasks and responsibilities that each employee will perform. Then, it’s critical that their managers are aware of their job responsibilities. Employees may request more pay if they are required to perform duties beyond the scope of their job description, so it’s critical to establish clear expectations for what they must accomplish so that everyone is in agreement.
Therefore, by practicing the above-listed steps, you can reduce the possibility of facing wage and hour claims and protect the reputation of your business.