Poor Recordkeeping Contributes to Contractor Paying $500K in Back Pay, Fines after Labor Department Probe, Litigation
A New York-based contractor agreed to pay 69 employees $500,000 in back wages and damages to resolve violations of the Fair Labor Standards Act’s overtime and recordkeeping requirements after being sued in federal court by the Department of Labor.
Poor FLSA compliance and recordkeeping that lead to steep Labor Department fines is avoidable, said employment law attorney William J. Anthony, a partner at Blank Rome in New York. The FLSA permits any form of timekeeping system as long as it accurately records all hours worked, he said.
“Many employers use electronic timekeeping systems and payroll companies to help with compliance and avoid legal issues,” he said.
Anthony cited four ways to clean up recordkeeping practices.
- Publish a policy on how to accurately record time and how to report any payroll errors.
- Have employees certify that their weekly time records are accurate.
- Train new employees on proper timekeeping.
- Monitor the timekeeping and payroll systems regularly to ensure accuracy.
Anthony also said that responsibility for accurate wage and hour recordkeeping typically falls on human resources or the in-house legal department to ensure compliance. In smaller organizations, it may be the owners or management personnel who are responsible, he said.
“Under the FLSA, an employer includes individuals with decision-making authority and operational control over payroll and wage and hour practices,” he said.
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“Poor Recordkeeping Contributes to Contractor Paying $500K in Back Pay, Fines after Labor Department Probe, Litigation,” by Rick Bell, was published in Workforce.com on June 16, 2021.