The distinction between exempt and non-exempt employees can, at times, be unclear for many employers. State and federal law may apply regardless. Indeed, the Fair Labor Standards Act (FLSA) requires that employers classify jobs as either exempt or nonexempt, so misclassifying an employee, even unintentionally, can result in serious legal trouble.
Nonexempt employees, as the term implies, are not exempt from FLSA requirements. Employees who fall within this category must be paid at least the federal minimum wage for each hour worked and given overtime pay of not less than one-and-a-half times their hourly rate for any hours worked beyond 40 each week. Generally speaking, non-exempt employees earning less than $455 per week, which is $23,660 per year, are guaranteed overtime pay, with limited exceptions.
As we head into a new year, it is helpful to review the timekeeping records that employers are required to maintain with respect to nonexempt employees. Maintaining proper records can be crucial when faced with a potential wage and hour (i.e. unpaid wages) lawsuit.
The DOL requires employers to maintain the following information:
- Employee’s full name and social security number
- Address, including zip code
- Birth date, if younger than 19
- Sex and occupation
- Time and day of week when employee’s workweek begins
- Hours worked each day
- Total hours worked each workweek
- Basis on which employee’s wages are paid (e.g., “$11 per hour,” “$445 a week,” “piecework”)
- 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
For employees working on fixed schedules, which consists of working hours and days that are the same from week to week, the DOL has created an exemption to item 7 (record of total hours worked). In order for an employer to qualify an employee for the exemption, the employee must indicate in writing that the employee has strictly adhered to the schedule. What’s more, if there are any weeks where the employee works more or less than the scheduled hours, the employee must note the exact number of hours worked each day and each week.
Not surprisingly, reliance on this exception can be come with its own risks. Often, an employee’s actual working time deviates from the standard schedule and the employee or the employer overlooks or is not aware of the need to document the deviation. This exception is one to discuss with your legal counsel, as not all states adhere to it.
How Must Employers Record Employee Hours?
Under federal law, employers are permitted to record hours worked in any manner that is complete and accurate. This can include a time clock, the observation of a timekeeper, or timesheets submitted by the employee. For any nonexempt employees that work at home, special care must be taken to accurately record hours worked.
Employers are responsible for maintaining compete and accurate time records. Failing to do so open the employer up to a claim for unpaid wages (by one employee or many, in the form of a class action).
For more information on how to keep accurate records and avoid a potential wage and hour lawsuit, contact experienced business attorney Drew E. Pomerance today.