There will be periods where time & labor tracking is a necessity for employees, even when they are paid by salary. Knowing the government rules and standards will better enable employers to utilize time tracking for workers who are non-exempt and exempt.
Understanding Exemption And Nonexemption
An effective time tracking system cannot be fully utilized until business owners have a fundamental understanding of the distinctions between exemption and Nonexemption employment. Both are explained within the FLSA, or Fair Labor Standards Act. Employees who are nonexempt are typically paid by the hour and meet specific FLSA requirements. Salary workers may be nonexempt as well. The Department of Labor considers salary employees nonexempt if they make $455 or less each week which equates to $23,660 annually. Workers who perform job tasks which are exempt and who are not paid less than $455 each week may be designated as exempt.
Overtime can be claimed by both non-exempt and exempt employees, which emphasizes the importance of accurate time tracking. The FLSA states that whenever a non-exempt employee puts in excess of forty hours in a single week, their employer must compensate them at a rate which is not lower than time and a half of their standard pay rate. Different states within the U.S. may have additional overtime requirements that employers must be in compliance of.
As you can see, good time keeping is essential to ensure that employees are being fairly paid for the hours they put in. Otherwise, business owners leave themselves vulnerable to fines and other penalties. While time tracking may not normally be a necessity for salaried workers who are exempt, because some employers pay additional wages for those who work beyond the standard work week, tracking should still be utilized.
Potential Overtime Changes
There are a number of changes which have been proposed for overtime. The Department of Labor has suggested a mandate that would raise the requirements for salary levels for white collar positions. Such mandates would expand their overtime protection and business owners should always keep abreast of these developments when considering the implementation of time tracking tools.
One of your goals as a business owner is to reduce unnecessary risk as much as possible. You can do this by staying up to date on government regulations regarding overtime pay, which are in a constant state of flux. It is also important to know when to track the hours your employees put in so that you can compensate them in accordance with both state and federal laws. The good news is that advanced time tracking tools have been developed which allows companies of all sizes to monitor their employee work hours with ease. Whether you’re a startup company or a Fortune 1000 enterprise, you will find that these tools provide the scalability and efficiency needed to ensure your employees make the best use of both their time and productivity.