Could Your Company Be Open To A $1.5million Fine? How to Protect YourCompany.

04 Aug Could Your Company Be Open To A $1.5million Fine? How to Protect YourCompany.

The NACPB recently reported that:

“Failure to Pay Workers for Pre-Shift Work Activities Will Cost Employer More than $1.5 Million

Farmers Insurance Inc. has agreed to pay over $1.5 million in back wages to 3,459 employees following an investigation by the U.S. Department of Labor’s Wage and Hour Division (WHD) that disclosed significant and systemic violations of the federal Fair Labor Standards Act’s (FLSA) overtime and record-keeping provisions. The violations occurred at 11 customer service call centers across the country [WHD News Release, Los Angeles-based Farmers Insurance to pay more than $1.5 million in back wages to nearly 3,500 employees following US Labor Department investigation,7/6/11].

The FLSA requires that covered employees be paid for pre-shift and post-shift job duties, and for attending required meetings.

Investigators found through interviews with employees and a review of the company’s timekeeping and payroll systems that the company did not account for time employees spent performing pre-shift work activities. Employees routinely performed an average of 30 minutes per week of unrecorded and uncompensated work, such as turning on work stations, logging into the company phone system, and initiating certain software applications necessary to begin their call center duties. Employees are owed compensation at time and one-half their regular rates for hours that exceeded 40 per week. Farmers Insurance has agreed to pay the back wages, as well as to maintain future compliance with the FLSA by properly recording and compensating all hours worked by its employees.”

Could your company be in violation?  Here is how to protect yourself.

• Pay people for their time on the job and don’t try to cut corners;
• Have a proper time record.  Electronic options are inexpensive and harder to tamper with;
• Have employees clock in when they arrive and before they leave (sounds simple right);
• Save your time records.  Don’t toss them after you run your payroll;
• Have a standard method for tracking adjustments or noting changes.  Consistency is key;
• Know and understand the rules for compensation in your state.  If you don’t know them hire someone who does.