If you are a manager, HR professional or anyone with a hand in the payroll process, you probably already know that altering employee payroll sheets can land an organization in a heap of litigation. According to a new ruling, even your personal assets can be targeted if you are found guilty.
Under the Fair Labor Standards Act (FLSA), employees now may sue their bosses or HR professionals for personal liability for making or authorizing adjustments to a worker’s time sheet. To prepare accordingly, organizations need to enforce strict rules regarding payroll adjustments and revisit their policies surrounding scheduled breaks or off-the-clock work. Companies taking charge of these areas greatly can reduce the risk of legal issues stemming from disgruntled employees.
Although it sounds obvious, off-the-clock violations commonly are misunderstood within the workforce. Under FLSA regulations, “hours worked” only applies when an employee is on duty and on the premises of their work. Managers only can assign duties to employees falling under those restrictions. Whether the task is taking out the trash, filing documents or dropping off company mail, managers can be held liable if the employee is not clocked in.
To avoid this situation, create a list of duties for an employee to complete before he/she clocks out for the day. A comprehensive list will communicate your expectations to employees and ensure the work is completed by employees who are still clocked-in.
Brake During Breaks
Over the past year, the U.S. Department of Labor has responded to an increase of complaints from employees who claim they were asked to work through breaks for a host of different reasons. Even if some of these complaints prove false, the problem easily can be avoided by HR taking proactive measures.
If your company offers an optional break, be sure to know the guidelines and communicate them to employees. To remain in compliance, an employee must be relieved completely of his or her duties for a break to go unpaid. For this reason, many organizations issue policies prohibiting their employees from eating lunch while at their desks. Although simple-sounding, the attitude behind it is necessary if organizations hope to avoid possible legal complications from overworked employees.
Slashing Time-Sheet Changes
Even more common than off-the-clock violations is the practice of altering employee time sheets. Although many immediately may think of “time-shaving,” the manager’s intentions behind these adjustments are usually the opposite. A large number of these approved payroll adjustments are completely benign and carried out for the benefit of the employee.
For example, adjustments occur when an employee forgets to clock in before a shift or a computer malfunction prohibits him or her from doing so. These situations frequently lead to incorrect time sheets. In order for payroll to be processed smoothly, managers are expected to correct these mistakes through payroll adjustments.
However, under this new ruling, management no longer can afford to adjust typical payroll errors. To minimize liability, require employees to be responsible for correct time records. While that may not be popular, it could help the organization avoid big fines and costly litigation.
Moral of the story: Bet on preparedness, not luck. With these three policy changes, you may be playing it safe, but you’re also reducing your risk, which is always the best bet.