Hours, Sch-mours. Why You Really Should Be Keeping Track
A couple weeks ago an oilfield service company was found to have violated the Fair Labor Standards Act. What did they do? Well, its really more about what they didn’t do. The company had failed to track the hours its employees were working per week and rigged a “day rate” to calculate wages in a manner that appeared to account for overtime.
Under the day-rate, employees were paid a single daily payment which encompassed a regular rate the first eight hours and an overtime rate for four hours . The issue, however, was that this was based on an estimate. Workers were “assumed” to work 12 hour shifts and, consequently, were paid for 12 hours regardless of the number of hours they actually worked.
As you usually see when “stuff” has hit the fan, the company alleged that they could not have willfully violated the act as they were relying on the advice of their attorney. They allege their attorney determined the rate was ok as long as employees did not work more than 12 hours. Whelp. Turns out Mr. Attorney was wrong.
But there were a few things their attorney did get right. One, employees should have been paid overtime for any hours over forty worked per week. Clearly, this was not heeded as the company decided to use their brilliant 8+4 model, even if someone possibly worked more than 40. Secondly, employees should not have been working more than 12 hours per day. And believe it or not, they didn’t listen to this either. Not only did the company fail to track the number of hours worked per day, but even if employees were working over 12 hours per day the company would not have known as they were not keeping track.
As you can imagine, the company was held liable for damages under the act.
Why is this important? Because the FLSA can apply to non-profit organizations as well. And in the midst of the collegial/family like environment many non-profits can have it becomes real easy for organizations to become loosey-goosey with the record-keeping.
1. If you haven’t already, familiarize yourself with the record keeping, minimum wage, child labor and overtime provisions of the FLSA. Even if you don’t fall under “covered enterprises” those that engage in certain interstate transactions or commerce will still be responsible.
2. Don’t trust everything your attorney tells you. Attorneys are people too, and they make mistakes. Always do your own research in the end. After all, when the Feds come knockin their not lookin for your attorney.
3. Along those same lines, if you plan to use your attorney as a defense it might help if you actually listen to them.
4. Make sure you have a good system in place to keep track of and authenticate the hours your people work.
If you would like to see what organizations are covered by the FLSA, and familiarize yourself with its provisions, look at the Department of Labor’s website. The Department of Labor also provides a website to help people understand the various provisions under the eLaws program.
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