Employment law: what does it really mean to your business? Most business owners I speak with see it as the elephant in the room, the one that needs to be addressed but if ignored, possibly it will not sit on them. Perhaps the elephant will find its way out of the room in search of some peanuts and disappear.
How you deal with the elephant as an employer is in direct correlation to your exposure and liability. Employment law is ever changing and exposing employers. One of those areas of exposure that employers often overlook is their HR recordkeeping. It is tedious and frustrating, as each law requires that certain records be kept for different periods of time, but the repercussions of not keeping up can be expensive, especially for an entrepreneur-owned business.
What are the records that you need to keep as an employer? According to the Fair Labor Standards Act (FLSA), which regulates the minimum hourly and overtime rate for non-exempt employees, and the Department of Labor (DOL), all employers must have the following information available on all of their non-exempt workers:
“Full name and social security number, address including zip code, date of birth if younger than 19, sex and occupation, time and day of the week when employee’s work week begins, hours worked each day, 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 work week, all additions or deductions from the employee’s wages, total wages paid each pay period, and date of payment and the pay period covered by the payment” – www.dol.gov
This is simply to meet the FLSA requirements, not to mention all the other record keeping guidelines to stay compliant with the other HR Laws.
All of these items begin to raise other questions, such as: How long must an employer keep these records and how are you as an employer tracking your employee’s time and information so that you have an accurate and complete record in the face of an audit?
- Employers must keep their payroll records for 3 years.
- Records with wage calculations (such as time keeping, additions and deductions, etc.) must be kept for 2 years.
These records must be accessible and open to inspection, should a Department of Labor representative be on site for an audit.
So, just how big is that elephant sitting in your office, and what can ignoring it cost you? According to the FLSA, employers could be liable for double the employee’s back wages and possibly 3 years of back wages, should they deem the violation of the FLSA willful.
Can you as an employer protect yourself from this elephant taking a seat right in your lap? Payroll and timekeeping systems and HR compliance management is a must for a business in today’s environment. Partnering with an HR Outsourcing provider like Staff One provides you online systems and HR support to keep your records compliant and reduce your liability as an employer, not just in regard to FLSA, but all employment and HR related laws and regulations.
If you are interested in learning more about how we work with our clients to reduce their liability, call us at 1.800.771.7823, or contact the author directly at firstname.lastname@example.org.