According to the Fair Labor Standards Act, accuracy is key for legal compliance. For practical purposes, employees can round their time worked to the nearest 15 minutes. If employers round down, then they must also round up from time to time so that their employees are fairly treated.
The following are the basic records that an employer is required to maintain:
- Employee’s full name and social security number
- Address
- Birthdate, if younger than 19
- Sex and occupation
- Time and day of the week when employee’s working week begins, hours worked each day, and total hours worked each week
- Basis on which employee’s wages are paid
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the workweek
- All additions to or deductions from the employee’s wages
- Total wages paid each pay period
- Date of payment and the pay period covered by the payment
Since there are no clear rules on how working hours should be kept, employee’ hours can be tracked, for example, on handwritten time cards or time sheets, by physically clocking in and out at work, or by using online time tracking software – as long as the total number of hours is set out in the work contract. However, as you might have guessed, land mines abound in everything from meal breaks to overtime, and privacy.
For example, each state has different rules when it comes to documenting meal breaks. While some states like New York and Connecticut require precise time tracking by clocking in and out, other states automatically deduct meal breaks from the daily working hours. In California, employers can omit the tracking of meal breaks as long as they provide employees with a 30-minute window. However, in some states, the employer can be penalized if they clock in early after a break because staff must be given adequate time to eat. And when auto-deductions are used, companies run the risk of facing class-action lawsuits if they wrongly presume that meal breaks are taken by all non-exempt employees when they shouldn’t.
Rounding time is another tricky area. Because many employers round time up or down to the nearest quarter or half-hour, it can obscure time spent working. As a consequence, employees may not be paid correctly.
As already touched upon, privacy is a major concern among the United States workforce. Digital technology has created many gray areas, like the limits of tracking employees via GPS, when they’re not working, or when they are on the road. In 2015, the company Intermex was sued by an ex-employee after she was fired for uninstalling an app on a company work phone that tracked her movements 24 hours a day every day of the week. These privacy limits vary from state to state.
Lastly, overtime is another hot topic in the United States. In the past decade, the number of overtime lawsuits have significantly increased, and will probably keep rising. In 2019, McDonald’s agreed to pay $26 million to settle a legal battle with California cooks and cashiers who accused the company of failing to properly pay them.
Under current FLSA regulations, nonexempt employees “must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.” It might seem straightforward, but determining which employees are exempt and nonexempt is tricky since it depends on various things such as salary, hours, duties, and the nature of the job itself.