All US-based businesses must track time for all of their non-exempt employees in order to be compliant with the Fair Labor Standards Act, or FLSA for short. If a company in the US is not complying to the FLSA, they could risk costly wage and hours lawsuits. To ensure this does not happen to your company, you must use some form of a time tracking system.
In this post, we will be exploring how Insightful, a PC screen time tracker, can help your business be FLSA compliant.
What is the Fair Labor Standards Act?
Before diving into how a time tracker can help your company be FLSA compliant, we first need to define what FLSA is and how the law affects both exempt and non-exempt employees.
The Fair Labor Standards Act (FLSA) is a law that protects the workers against some unfair work regulations and pay practices. Basically, it sets out labor regulations regarding the minimum wage, overtime pay, and limitations on child labor. Its rules and regulations apply to full-time and part-time employees in the private sector, as well as those working in Federal, State, and local governments.
The law was passed in 1938 by President Franklin D. Roosevelt. FLSA was changed many times but it still remains one of the most important laws employers must understand due to it including a lot of employee-related regulations.
Regarding time tracking, FLSA states that employees may use a timekeeping method of their choice, as long as the method is accurate and complete. The most common timekeeping methods include a PC screen time tracker, timesheets which employees fill in manually, and time cards.
What Is the Difference Between Exempt and Non-Exempt Employees?
There are two types of employees in the workplace - exempt and non-exempt ones. The main difference between the two is the pay for overtime work. The term "exempt" refers to the employees being exempt from getting paid overtime.
The FLSA requires that employers pay at least the minimum wage and any overtime pay unless the employee is in the exception category. Employees are considered exempt when they are paid on a salary basis (instead of the usual hourly pay that the non-exempt get) for doing administrative, professional, or executive duties.
Non-exempt employees are entitled to overtime pay. The FLSA requires employees to pay half of the employee's regular hour rate for each hour they work overtime.
How to Track Time so That It Complies With the FLSA?
For a company to be compliant with the FLSA, it is important that they keep track of how many hours have the employees worked. As previously mentioned there is no preferred method of timekeeping. It only needs to be accurate and precise.
For records to be accurate and precise, they must be kept daily and include when the employee arrived at work, the time they were on break (including the lunch break), when they got off work, and the total number of hours that the employee has worked. FLSA allows for the time to be rounded, usually to a quarter hour of work.
A PC Screen Time Tracker and the FLSA
Insightful can help you easily track how much time each of your employees has worked during any given day, week, or month. You can also see the exact amount of hours they have worked, allowing you to more easily log time so that is FLSA-compliant.
The FLSA is very strict about overtime work, which is why the time tracking software can be customized so that it complies with your specific office environments as well as any local or state laws. This basically means that the time tracker will easily be able to differentiate regular working hours from overtime hours.
Recording the exact break time is one of the requirements of FLSA and Insightful can do that for you. If your employees activate the break time option in our PC screen time tracker, you will be able to see how long they were on a break during the day. Our tool also tracks compute activity, you will be able to see the inactive times of your employees and determine whether or not that time should be included in their break time.
Insightful can even simplify your payroll calculation for every employee. You can enter pay rates for regular and overtime hours for each of your non-exempt employees, and at the end of the week you can receive a full report on their working hours and the amount you should pay them. These email reports will also come in very handy - you can send them directly to your accounting department on a weekly, biweekly or monthly frequency.
What Are Your Next Steps?
Complying with the FLSA is a must for all US businesses. How you track time is up to you. You can do it manually or automatically.
Manually tracking time takes a lot more hours and manpower if you want it to be accurate, precise, and FLSA-compliant.
If you choose to automatically track time using a daily activity log software, the entire process can be much much more simpler, as our app is easy to install and use. An automated time tracker allows you to focus on your work without having to worry about whether or not someone made a mistake while manually tracking time.