Human resources teams are in charge of ensuring employees meet certain standards and job requirements. While completion of the task at hand is important, these company leaders must also pay attention to wage and hour laws in respect to those responsibilities. Violations of this kind are some of the most common issues businesses face on a regular basis.
As the government continues to hold organizations responsible for these mistakes, more laws relating to this obligation are created. One of the most recent is a California regulation that aims to make company executives pay for violations, according to the Society for Human Resource Management. As more laws like this one are released, organizations need to find ways to avoid wage and hour mishaps. Let's take a look at three steps businesses can take to do just that:
1. Create a transparent policy
HR teams need their employees as allies to ensure the number of wage and hour violations is as small as possible. To keep all parties on the same page, company leaders should create a clear-cut policy regarding federal and state compliance, worker breaks, overtime and tracking hours, according to Leeds Brown Law, P.C. Laying all of this information out – and educating employees on the procedure – can reduce the number of mistakes made and keep financial penalties low. It's crucial for everyone to be aware of the policy, so there's no serious misunderstandings regarding the rules.
"Independent contractors are not eligible to receive overtime pay."
2. Correctly classify employees
The Fair Labor Standards Act's overtime law recently changed, making workers who make $913 per week or $47,476 per year or less eligible to receive additional pay. This regulation altered the classification for a number of employees who were previously unable to collect overtime. It's important for companies to be aware of the amount of people eligible for this benefit on their worker roster, according to Accounting Web. On top of understanding wage information, businesses also need to differentiate between regular employees and independent contractors. While the former is qualified for overtime pay, the latter doesn't have access to that benefit through the organization that hires them.
3. Perform regular audits
It's understandable for company leaders to make mistakes during their career; they're human, after all. Yet, making errors doesn't mean they won't come with repercussions or a price tag. To avoid wage and hour problems, businesses should conduct frequent audits. These check-ups help organizations ensure all workers receive the pay they should and company processes are following local, state and federal regulations. Examinations of team records can point out timekeeping procedures that need to be updated. Performing regular audits is a smart way for organizations to reduce the number of wage and hour violations and penalties they potentially face.
Employers can find themselves in costly trouble if they incur wage and hour violations. It's crucial for businesses to follow these laws to avoid a damaged reputation and loss of employee satisfaction and loyalty. To dodge these penalties, organizations should create a clear-cut policy employees can comprehend, understand worker classifications, perform them correctly and regularly audit their practices.