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

by

Dale R. Bykowicz
Business Success Coach
October 29, 2019
/
5
minutes to read

Are you keeping thorough and accurate records of your employees’ work time? If you can’t answer that question with a confident “yes,” getting there should be a top priority. 

Why? To put it simply ...

It’s Not a Choice. It’s the Law.

The federal Fair Labor Standards Act (FLSA) requires just about all employers to keep records of, among other things, “hours worked each day and total hours worked each workweek.” In turn, state labor departments impose their own requirements. (Here’s what New York State has to say on the matter, as an example.)

But also consider these very real possibilities, which could spring up without warning: 

  • What if a former tech files a lawsuit alleging that you owe him overtime? 
  • What if you’re the lucky winner of your state’s next wage and hour audit? 
  • Or what if your dispatcher needs to use several weeks of family leave to care for her aging parents?

Any of these situations can cause significant disruption to your business, even if you’ve done nothing wrong. But the better organized your employee time records are, the better you’ll be able to respond in a way that minimizes the disruption as well as your potential for liability. 

And, after decades of experience as an owner and manager in the home services field, I can tell you that relying on piles of paper and sticky notes simply won’t cut it anymore when such an event occurs. Here’s why. 

Overtime Disputes Happen Every Day

Each year, employers across the country get hit with thousands of FLSA lawsuits, many of which are related to back pay for overtime. How big a deal is this? The Wage and Hour Division of the U.S. Department of Labor notes that in fiscal year 2019, it recovered a record $322 million in wages owed to workers. 

In our line of work, overtime is a constant concern. Plumbing, electrical and HVAC work often extends (or begins) well past any conventional notion of the end of a workday, making it exceptionally critical for home services contractors to keep rock-solid records. 

Let’s say a former employee files a claim alleging that you owe him thousands of dollars in unpaid OT. As one lawyer in New York State puts it, “Where an employer doesn’t keep the records required by law, the employee’s burden of proof is lightened. In such a case, an employee can establish the number of weekly hours worked based simply on his own testimony or affidavit indicating his recollection of the estimated hours worked.” 

In other words, if you’re not keeping up with your obligation to keep accurate wage and hour records, you start off at an immediate disadvantage. The case could devolve into the former employee’s memory vs. yours. That’s likely to drag out the length (and, significantly, the cost) of the case and diminish your chances for a positive outcome.

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How Software Can Help

Getting away from paper-based time management and into a software system that collects timecard data will help ensure you’re meeting your legal obligations. It will also help you get your company’s ducks in a row, so to speak, in case you ever have to respond to questions about the hours an employee did or didn’t work. This is especially true with software that allows employees to clock in or out on their own, and set a status like “dispatched,” “working a job” or “meal break” while doing so, as Pointman’s field management system does.

In my experience, though, there is an added benefit: Getting employees and management engaged together through technology-backed timekeeping helps reduce the likelihood of a time disagreement escalating into something as adversarial as a lawsuit. For example, if a tech gets paid for 39 hours in a particular week but says she worked 42, you can easily look at the data together and determine where the mistake was made, then correct it quickly and easily. Instead of employee vs. management, it’s the two of you together vs. the discrepancy. Relying on memory and Post-Its for your rebuttal is likely to lead to distrust among your workforce when they disagree with their paycheck.

Think of it like car insurance. You hope you never have to use it — but would you consider driving without it?

Up next:

In Part 2 of this blog, we’ll explore the roles recordkeeping and software play in state wage/hour audits as well as requests to take extended family or medical leave.

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

What if you’re the lucky winner of your state’s next labor audit? Learn how accurate recordkeeping — and the right software — is critical for your business.

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