Why Accurate Timekeeping Is Critical, Pt. 2: Labor Audits and Family Leave


Dale R. Bykowicz
Business Success Coach
November 5, 2019
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The question bears repeating: Are you keeping thorough and accurate records of your employees’ work time? 

As we noted in last week’s blog, this is not a luxury or a choice for residential plumbing, electrical, and heating and cooling contractors. Federal and state laws actually require you to keep records of, as the federal Fair Labor Standards Act (FLSA) explains it, “accurate information about the employee and data about the hours worked and the wages earned.”

While it might be tempting to think old-school “guesstimating” can suffice — after all, who’s watching, right? — the truth is certain events can shine an unwanted legal or regulatory light on your practices. And, as we explored last week in the case of disagreements over overtime, not having accurate and easily accessible data puts you at a significant disadvantage in case of a legal dispute.

Now, let’s look at two other reasons it’s important to have good practices and the right tools in place: labor audits and family or medical leave.

Why Accurate Timekeeping Is Critical, Pt. 1: OT Disputes

What if a former tech files a lawsuit alleging that you owe him overtime? Learn how accurate recordkeeping — and the right software — is critical for your defense.

Are You Prepared for a State Wage/Hour Audit? 

Again, the home services industry is a different breed from other businesses in terms of time tracking. Many times, a job can’t be simply put down for a half hour just because the clock strikes noon. What if your tech just worked through lunch, or thought she’d simply make it up at the end of the day? Did that get tracked? How often does this happen? 

With each state keeping its own set of laws about length, timing and other aspects of breaks, it’s important to know whether your practices or the unsanctioned activities of your employees could be against the law. (In the above example, that’s probably the case.) 

If you’re using software with time tracking and status setting capabilities, you’ll be much better positioned not only to identify trends before they become problems — but also to weather a wage/hour audit from your state’s labor department in the most efficient way possible. 

I once experienced a state audit of this kind. Even with extremely well-organized information and the ultimate determination that nothing was amiss, the distraction consumed the better part of a week for my company.

Imagine if the state auditors looking into your company have to wade through stacks of unorganized time slips, and you’re unable to answer their questions because you can’t find accurate records. The audit could cost you unthinkable amounts of time and frustration.

But if you’ve got software capable of running reports on total hours by day, week, month, year or whatever the time period in question is, you could provide the state the information it needs with just a few clicks. Software that also allows employees to set a status when they clock in or out (like “dispatched,” “working a job” or “meal break”) is especially helpful to auditors who are relying on your cooperation. (That’s a good thing.)

Oh, and overtime? Not shockingly, still a factor. As The ACHR News reported, lax meal and rest period practices could create overtime liability if employees work through some or all of their breaks.

Is Your Employee Eligible for Family or Medical Leave?

When a member of your team needs to take an extended break, to care for either their own health or that of a family member, it’s a delicate balancing act for you as an employer. Of course, you want to do everything you can to accommodate their needs — a positive workplace culture is critical for keeping good employees — but at the same time, you’ve got to play by the rules both for your business and to stay in compliance with the law.

The federal Family and Medical Leave Act (FMLA) provides up to 12 work weeks of unpaid leave in a year for eligible employees. According to the U.S. Department of Labor, eligible employees “have worked 1,250 hours during the 12 months prior to the start of leave,” among other requirements.

While the FMLA doesn’t apply to employees of companies under 50 employees, states have their own regulations, as is always the case. 

To use New York as an example again, it maintains its own Paid Family Leave law that, as the law firm Goldberg Segalla notes, “covers all employers — regardless of size — and requires them to provide eligible employees with 12 weeks of paid family leave.” 

Under the New York Paid Family Leave law, which the state touts as the nation’s strongest of its kind, determining an employee’s eligibility takes into account a number of variables — part-time or full-time status, average number of hours worked per week, a threshold of total days or weeks worked for the employer, whether that time was consecutive, use of vacation during that time, and other factors all come into play. 

In these situations, you want to do the right thing for your employees and your business. But if you’re still using primitive timekeeping techniques, you’ll likely have a difficult time gathering information to the level of accuracy you need. 

And if your employees don’t get the leave they request because your records are off? Chances are you’ll be hearing from their lawyer.

The Bottom Line

You can’t necessarily anticipate when an audit, a lawsuit or any type of hours-related claim will arise. And no company can completely avoid the business disruption, financial impact and other burdens that accompany these events. 

If an auditor, lawyer or government agency asks you for payroll records and you respond by calmly and quickly handing over a report covering all the bases they’ve asked about? They’re going to know that you’ve done your part, you’re well-organized, and you’re making a good-faith effort to minimize the time spent by all parties involved. 

But if you’re scrambling through unorganized slips of paper? You won’t come across as very organized, and you could harm your own interests in the matter.

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