Tag: overtime

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5 Tips to Simplify Overtime Calculations

Summary

  • Challenges with overtime calculations don’t just come with the math. It’s all the manual processes involved, especially with different pay conditions and compliance rules.
  • Overtime calculations can be simplified. In fact, an LA-based organization reduced time processing timesheets by 92%.
  • Payroll software can significantly reduce errors and time spent on calculating overtime.

Overtime pay calculations can feel like a full-time job, even if it’s just one of the many things that go into payroll. Different pay rates, tracking total number of hours, changing schedules, and compliance rules make it tricky, especially when you’re running an hourly team on multiple shifts. When you dig deeper into it, however, the real problem isn’t the math. It’s the manual work. 

So, how can you simplify the process, reduce errors, and ensure that employees are paid on time? Here are five practical ways to do so.

1. Improve your onboarding process

Onboarding is not just about welcoming new hires. It’s about setting up systems that make payroll, including overtime, easier to manage.

When we think of onboarding, we usually focus on getting new hires up to speed and integrated into the team. But the behind-the-scenes admin work during this stage plays a massive role in how seamless (or messy) payroll and overtime processing will be down the line.

Proper onboarding ensures accurate classification from day one. If you misclassify employees (exempt vs. non-exempt), you can face overtime compliance issues later on. This is also the perfect time to set clear expectations around overtime—when it kicks in, what overtime premium rates apply, straight time pay policies, and other relevant conditions.

Onboarding is also the time to get new hires up and running on your time-tracking system. 

Show them how to clock in and out correctly and how time logs are generated into timesheets. Getting new hires set up in your time-tracking system early prevents payroll errors later.Onboarding on its own can feel like too much admin and paperwork. Workforce.com has an automated system for getting new hires onto your system. New hires get a link to the onboarding platform and input their information, minimizing errors and admin work for your team. You can also upload contracts, handbooks, and other key documents, plus create employee profiles with base pay and classifications.

2. Automate time and attendance tracking

Employee work hours are at the core of processing payroll and calculating overtime pay. Manually processing timesheets and payroll is not only time-consuming but also increases the risk of payroll errors, underpayments, and compliance issues. 

An automated time and attendance system ensures all hours of work are recorded accurately, so you don’t have to second-guess overtime calculations. Workforce.com captures time logs through a tablet placed on your job site or directly from an employee’s mobile phone. The system logs location data, which is essential if you manage teams in different locations. 

Clock ins and outs are generated into timesheets, indicating the total number of hours. Overtime hours are flagged, and managers can quickly review and approve in seconds and fix any discrepancies before payroll processing. 

For Lisa Hanna, business manager at Ethos Orthodontics, payroll used to be a three-day ordeal. “Generally, I’d spend a few hours each Sunday printing out and processing timesheets to get them ready for payroll that week,” she shared.

With Workforce.com, Hanna got her Sundays back as the system prepared the timesheets for her. It now only takes a few clicks to approve and export timesheets for payroll, reducing the admin load and compliance risks.

3. Set overtime alerts

Overtime is sometimes necessary, but it shouldn’t be eating into your budget unless it absolutely needs to. 

Workforce.com keeps overtime under control with real-time visibility. When scheduling, managers get an alert when an employee is scheduled for more than their regular hours. If it’s intentional, great—no surprises on payday. But if it’s an accident? You can fix it before it turns into an unnecessary payroll expense.

The system also flags when employee hours are about to hit overtime. If someone’s shift is over but they’re still clocked in, managers get notified. At that point, they can check in: Did the employee forget to clock out? Are they actually working? If so, is overtime work truly needed, or can the task wait until the next shift?

These real-time alerts prevent unplanned overtime, keep labor costs in check, and even promote better work-life balance for your team.

4. Use payroll software

Payroll software can simplify overtime calculations, but only if it’s built to handle the complexities of your workforce. 

Consider your payroll needs and go for the solution that meets your requirements. Whether you’re looking for software or planning to switch to a different system, consider the following: 

  • Overtime and labor laws – Can it keep up with changing labor laws? Does it account for both federal and state overtime rules? Can it automatically update tax rates?
  • Integration and data entry – Does it sync well with time tracking and HR? Can data flow smoothly from one module to the next, or will you be stuck with manual entry?
  • Customization – Aside from employee’s regular rate, can it handle shift differentials, different rates, fluctuating workweeks, non-discretionary bonuses, weighted average calculations, and other conditions and exemptions?
  • Ease of use and implementation – How long does it take to roll out? Can employees actually use it without a steep learning curve? Even the most advanced features are useless if your team avoids the system. 

Mikhuna, an LA-based food truck business, teamed up with Workforce.com to simplify payroll processing, time and attendance tracking, and employee scheduling. Because everything is now done on a single platform, they saw a 92% decrease in time spent correcting timesheets and saved three hours on payroll processing.

“It used to take me between two to three hours to run payroll,” Cynthia Carreiro, Mikhuna’s CFO, shared. “Now it takes no more than 3 minutes.” 

Beyond saving time, Mikhuna also gained real-time visibility into labor costs. “A year from now, I’ll be able to look back at a pay run from the same time last year and see if I’m losing or making money,” Carreiro adds.

When payroll software is built right, it doesn’t just save time. It gives you the insights you need to make smarter business decisions.

5. Understand overtime rules that apply to your workforce

Even with the best payroll software, your managers and HR team still need a firm grasp of how overtime rules work not only for processing payroll but also for answering employee faqs. 

At the very least, managers should know existing federal laws and state rules around overtime. Under the Fair Labor Standards Act (FLSA) rules, nonexempt employees must receive overtime pay for hours worked in excess of 40 in a workweek at one and a half times their regular rate of pay. But here’s the kicker—what actually makes an employee exempt or nonexempt? The Department of Labor set the guidelines on what makes an employee exempt or non-exempt to overtime pay. While hourly employees are typically non-exempt, salaried employees may also be entitled to overtime if they meet the criteria on salary levels and job duties.

What about regular rate of pay calculations? What goes into in exactly? Aside from regular hourly rate, salaries (for salaried, nonexempt employees), nondiscretionary bonuses, shift differentials, piece-rate pay, and commission must be included in the computation.

Leadership teams should be able to provide a clear, high-level explanation on these areas, especially when they concern employees’ total compensation.

Also read: Exempt vs. non-exempt employees: knowing the difference

If you operate in a state with stricter overtime laws, that’s another layer of compliance to manage. Take California, for example. Daily overtime is recognized in California, which means that workers are entitled to overtime payments when they work more than 8 hours in a single workday or over 40 hours in a single workweek. This is different from FLSA rules, which calculate total overtime based on hours worked in a 40-hour workweek rather than a single workday

The overtime pay rate also varies in California. Employers must pay one and a half times the regular rate of pay after 8 hours a day. But double time or twice the regular rate of pay takes effect for employees who work after 12 hours a day or after 8 hours on the seventh consecutive workday.

Also read: California Overtime Laws Explained: What Employers Need to Know

Payroll software can handle the calculations for you according to applicable federal and state laws. However, your team still needs to understand the rules, both to ensure your systems are running correctly and to confidently handle employee questions.

Stop Working Overtime to Calculate Overtime

Calculating overtime wages shouldn’t steal your weekends or keep you at the office late. With the right system, you can automate not just the math but also streamline its administrative side.

Workforce.com automatically calculates overtime, no matter how complex your pay setup is. Whether you have shift differentials, double time, fluctuating workweeks, or non-discretionary bonuses, the system handles it all.

It also keeps up with labor laws to ensure compliance at every step. Need to update an employee’s pay rate or adjust your overtime policy? Just enter it once, and the system updates everything—from time tracking to payroll—without extra work on your end.

Overtime shouldn’t be an admin nightmare. See how Workforce.com makes it simple for businesses worldwide. Check out our customer stories or book a demo today. 

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8 proven ways to reduce overtime & labor costs (2025)

painting of a bartender with a large clock behind him

Summary

  • Unnecessary overtime and an increase in labor cost can be caused by several factors, one of which is the lack of an efficient HR and payroll system.

  • Overtime is not inherently bad, but if it becomes excessive, it can affect your bottom line and cause employee burnout.

  • The right software can curb labor cost increases without sacrificing operations and employee satisfaction.

Labor costs and overtime take up a significant portion of business expenses. While extended work hours are occasionally necessary, they can quickly become a burden if they occur too often and strain your finances.

But what causes unnecessary overtime and increase in labor costs? Common culprits include failure to anticipate demand, antiquated HR and workforce management systems, and the lack of real-time operational visibility. These issues not only impact your bottom line but can also harm employee engagement and disrupt work-life balance.

So, how do you reduce labor costs and overtime without sacrificing operations and employee well-being? Here are eight practical ways Workforce.com can help you achieve just that.

1. Forecast labor demand.

An effective cost reduction strategy is to anticipate demand. Sure, no one knows what exactly will happen on the next business day or week, but having an estimate based on relevant data points can give you a good idea of staffing needed per shift. 

Workforce.com can forecast labor demand by analyzing indicators such as weather, foot traffic, historical sales, economic trends, events, holidays, booked appointments, and other relevant factors. With these insights, you can better anticipate demand for a given period, reducing the risks of overstaffing.

Starbucks Australia is one of the organizations that experienced lower labor costs when they started using Workforce.com. Because they have many store locations, anticipating demand was challenging since each store is different. However, with Workforce.com, they can create labor-efficient schedules based on demand up to four weeks in advance, ensuring the right amount of staff is always scheduled for the right number of customers.  

2. Quickly fill vacant shifts due to no-shows or last-minute absences.

No-shows or last-minute absences are inevitable in managing a team, but how they affect your operation and labor costs will depend on how effectively you address them.

When an employee notifies you that they can’t work a shift at the last minute, you must quickly cover the vacant shift. Otherwise, you may need to rely on overtime, driving up labor costs unnecessarily.

Workforce.com equips frontline managers to offer a vacant shift to other qualified team members. Case in point: The Winnipeg Jets. Before using Workforce.com, they had difficulty managing no-shows, especially when they experienced 80 replacements in a week, and there was no centralized way of managing these swaps. Using Workforce.com, managers can offer vacant shifts and fill them quickly, all in one platform, without calls, emails, or texts. 

“With Workforce.com, switching shifts is so much easier. I don’t know anyone who’s not using it,” says Kristin LaCroix, TrueNorth’s Director of Technology Services. “Everyone got on board with it pretty quickly.”

3. See labor costs in real-time when creating schedules.

Staying on top of labor costs means understanding your expenses before they’re incurred. Workforce.com offers that visibility. 

When scheduling or creating shifts, Workforce.com displays wage costs in real time, enabling managers to keep staffing levels aligned with labor budget allocations and customer demand.

“We know for each shift, what its cost is without having to crunch any numbers on a spreadsheet,” says Troy Persad, General Manager at Bridge Control Services. When building schedules, every shift tile displays wage costs, which he uses to optimize shifts according to the budget and crew’s needs.

The same goes for The Winnipeg Jets, “Workforce.com is preparing us to become a little bit more strategic in how we schedule,” shares LaCroix. “It helps us move staff to different times if we see inefficiencies, helping us provide a better experience to our guests.”

Workforce.com plays a massive role in helping you schedule in a way that keeps overtime costs low. Scheduling software tracks work hours and unavailability, automatically suggesting the most cost-effective people for coverage while avoiding unnecessary overtime. It lets you see wage costs for every shift, so you’ll always know how much your business spends on labor in real time.

This kind of automation reduces the overtime errors that come with scheduling via spreadsheets. For instance, Workforce.com will alert managers whenever they try to schedule a shift that will cause an employee to dip into overtime. It also keeps track of maximum work hours and prevents managers from scheduling employees for more than is legally allowed, depending on your state.

4. Track employee hours and overtime down to the minute.

Workforce.com’s time and attendance management software helps you track, manage, and calculate overtime and labor expenses. It alerts your frontline managers whenever an employee hits overtime and automatically records overtime hours and time and a half pay on digital timesheets. These timesheets display scheduled vs. actual hours and labor cost variances, making it easy to pinpoint where and when you are spending too much on overtime.

“There was no real way with our old system to compare variance,” says Kayleen Nemanishen, a configuration analyst for Ranch Ehrlo Society. “With Workforce.com, it’s super apparent – if somebody works 30 minutes longer than scheduled, it shows right on their timesheet.”

More importantly, automated employee time tracking helps you avoid tricky situations where employees claim to have worked more overtime than you have on record. By default, the Department of Labor assumes that the employee is right about the number of overtime hours they worked unless the business owner can provide proof otherwise.

With timesheets recorded daily, you avoid time reporting disputes, protect your business from paying out overtime that was never actually worked, and stay compliant with labor laws. This increases accountability and ensures your overtime tracking is airtight, helping you avoid costly DOL fines and employee lawsuits.

5. Set a labor budget.

Set a cap on an amount or the number of hours you can allocate every day to meet demand for every day, week, or month. This is all about finding the right balance between supporting your employees and improving your bottom line. Setting hard limits on hours worked encourages managers and employees to adapt and become more efficient with navigating overtime. 

On Workforce.com, you can set labor budgets and track schedules and shifts against your set allocation. You can set and plan labor budgets by location or department. Budgets can be shown either in hours or wages.

Of course, setting limits doesn’t disqualify you from paying overtime worked beyond them. The law stipulates that any time over 40 hours has to be paid as overtime. So, if someone has exceeded your overtime budget, ensure you have an accurate way of recording, calculating, and alerting managers to all overtime pay owed. 

6. Offer flexibility with sending schedules in advance.

Flexibility is different for hourly workers. For them, it’s about knowing their shifts well in advance so they can plan other areas of their lives, such as childcare, medical appointments, or PTO. But is scheduling shifts far in advance always productive?

The answer is yes—if done correctly, Workforce.com can help you schedule in advance because it can predict demand and create shifts quickly. You can even create reusable shift templates for consistent schedules, streamlining the process week after week.

Publishing schedules in advance reduces no-shows and last-minute absences and helps control labor costs by minimizing disruptions. Additionally, it ensures compliance with predictive scheduling or Fair Workweek laws in cities where these regulations apply, protecting your business from potential fines.

7. Equip your team with the right labor tracking tools.

Unnecessary labor costs often stem from minor errors or administrative oversights, such as missed log-ins or accidentally scheduling employees beyond their allowed hours. These mistakes are easy to overlook, mainly when relying on manual processes or inefficient systems.

Workforce.com streamline time-consuming administrative tasks and reducing the errors associated with manual input. The Amenity Collective saw a drastic drop in time spent on admin work since implementing Workforce.com in their organization—from 20 hours a week to just 3 hours. 

“With Workforce.com, we’ve been able to reduce the time our staffers spend publishing schedules by 85% – that is a huge efficiency gain for our organization and for our employees,” says Adam Chen, CIO of the Amenity Collective. “What that allows our employees to do is spend more time building stronger relationships.”

Workforce.com offers a real-time view of what’s happening in every shift. It shows who clocked in, who’s running late, and who’s about to go into overtime. HR and operational data can be accessed anytime—no need to wait for month-end reports. 

In addition, Workforce.com has a powerful employee self-service system that enables staff to clock in and out easily, view their work schedules, get notified for open shifts, request leaves, and update their information. These tools lighten the administrative workload and reduce errors and inaccuracies. 

8. Cross-train to bolster your workforce.

If only a few of your team members can carry out specific tasks, you’ll end up in a situation where the same few people get overtime. This can lead to employee turnover , as excessive overtime disrupts work-life balance. At the same time, it can dampen employee morale as staff who aren’t offered overtime opportunities may feel unfairly treated, missing out on the extra pay.

The solution? Conduct cross-training programs for different roles. This way, you can fill vacant shifts with a larger pool of qualified employees. Cross-trained employees not only help you avoid scheduling unnecessary overtime but also allow you to divvy overtime in a fairer manner if needed.

Workforce.com’s performance management system makes this process more efficient. It lets you track employee progress and development, identify their strengths, and provide targeted training to expand their skill sets.

Stay on top of labor costs and overtime with Workforce.com

Running a cost-effective operation starts with the right tools. Manual processes increase the risk of unnecessary overtime costs and waste valuable time on tasks that could be completed in minutes with a more efficient system.

Workforce.com has a comprehensive suite of solutions to help you stay on top of your labor budgets, reduce overtime, and simplify payroll processing. Want to see what else Workforce.com can do for your business? Book a call today.

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What is time and a half pay + how to calculate it

Summary:

  • Under the FLSA, time and a half is the rate at which non-exempt employees earn overtime for every hour worked beyond 40 in a week.

  • Calculate time and a half pay by multiplying an employee’s regular pay rate by a factor of 1.5 for every hour of overtime. However, the steps may differ depending on whether the employee is hourly or salaried, or if bonuses are included in their pay.

  • With HR and payroll software, employers can calculate time and a half pay automatically.

Understanding time and a half or overtime pay is essential if you employ non-exempt workers. While it might sound straightforward (extra pay for extra hours), FLSA rules and varying state laws can make it complicated. Mistakes in calculating overtime pay and identifying who qualifies can lead to non-compliance and penalties. This guide breaks down what time and a half is, how to calculate it, and how to stay compliant.

What is time and a half and how does it work?

Time and a half pay refers to the overtime pay that non-exempt employees are entitled to when they work for more than 40 hours a week, as mandated by the Fair Labor Standards Act (FLSA). It’s called time and a half pay because it’s equivalent to an employee’s hourly rate multiplied by 1.5 per hour of overtime.

Who qualifies for time and a half?

According to the FLSA , some employees are exempt from time and a half pay, while others are non-exempt. Exemption and non-exemption are driven by factors such as wages and the job duties performed.  So what makes an employee exempt from receiving time and a half pay?

As a general rule of thumb, most salaried employees are exempt from time and a half pay if they earn more than $844 in weekly pay or $43,888 in annual salary. This threshold took effect on July 1, 2024. Previously, the weekly wage limit was only $684. On January 1, 2025, the threshold will go up to $1,128 per week or $58,656 per year, and beginning July 1, 2027, these limits will be updated every three years, according to the US Department of Labor’s new ruling.

This means that hourly employees working standard 40-hour workweeks in the usual frontline industries (retail, hospitality, healthcare, etc.) are non-exempt and must receive time and a half pay if they go into overtime.

To know more about what makes an employee exempt or non-exempt, read this guide.

How to calculate time and a half pay

When calculating overtime pay for non-exempt employees , you need to understand how to do it for hourly and salaried workers. Hourly workers may take up the lion’s share of non-exempt workers entitled to time and a half pay , but it’s also vital to know how to calculate overtime pay for non-exempt salaried employees.

Calculating time and a half pay for hourly workers

Calculating time and a half for hourly workers is fairly straightforward because you’re already aware of their hourly rate . To compute overtime pay , look at this example and follow these steps. 

Say, Dave is an hourly worker who earns $13 per hour. For this week, Dave has worked a total of 50 hours. How much do you need to pay him, including overtime?  

1. First, you need to get the total regular wages for the week. Multiply the employee’s regular rate by 40 hours.

$13 x 40 hours = $520 in regular wages

2. To get the hourly time and a half rate, multiply the regular hourly wage by 1.5.

$13 x 1.5 = $19.5 per hour of overtime

3. Multiply the hourly overtime pay by the number of overtime hours rendered.

$19.5 x 10 = $195 of overtime pay

4. Add both regular and overtime wages. 

$520 + $195 = $715In this example, Dave should receive a gross pay amounting to $715, which accounted for regular 40 hours and 10 hours of overtime worked.

Calculating time and a half pay for salaried employees

Calculating time and a half pay for salaried employees requires an extra step to get the hourly pay rate because they are paid a fixed wage. 

For instance, Lisa earns a fixed weekly salary of $750, and she’s expected to work 36 hours. But for this week, she has worked a total of 48 hours. Here’s how you can compute her overtime pay.  

1. Find the regular hourly rate by dividing the fixed weekly salary by the employee’s fixed hours. 

$750 / 36 hours = $20.83 per hour of regular work

2. Calculate the employee’s total regular wages. 

$20.83 x 40 hours = $833.20

3. Multiply the regular hourly rate by 1.5 to get the time and a half pay rate.

$20.83 x 1.5 = $31.25 per overtime hour

4. Calculate the total overtime wages

$31.25 × 8 = $250.00

5. Add regular and overtime wages.

$833.20 (regular wages) + $250.00 (overtime wages) = $1,083.20

In this example, Lisa needs to get a total of $1,083.20 in wages that includes both regular wages and time and a half pay for 8 hours of overtime work. 

FLSA typically uses a 40-hour work week for overtime calculations, but companies can choose to pay overtime based on the weekly work hours agreed upon. For instance, Lisa’s employers can choose to start paying her overtime once she exceeds 36 hours, provided that there’s a specific company policy that states so.

Calculating time and a half pay with bonuses

Nondiscretionary bonuses should be included in the calculation of time and a half pay. Here’s an example of how you can compute the overtime pay with a bonus. 

For example, John earns $12 an hour, worked 48 hours this week, and received a bonus of $20 for perfect attendance. Here’s how to compute his regular pay and time and a half pay that accounts for that bonus. 

1. Calculate the straight-time earnings for the week by adding the total number of hours. 

$12 x 48 hours = $576

2. Add the nondiscretionary bonus. 

Total earnings (before overtime adjustment) = $576 + $20 = $596.

3. Calculate the new regular hourly rate based on the straight-time earnings for the week. 

$596 / 48 hours = $12.42 standard hourly rate

4. Multiply the new regular hourly rate by 40 to get the regular wages for the week. 

$12.42 x 40 = $496.8

5. Calculate the hourly overtime rate by multiplying the standard hourly rate by 1.5.

$12.42 x 1.5 = $18.63 per hour of overtime

6. Multiply the hourly overtime rate by overtime hours worked. 

$18.63 × 8  = $149.04

7. Add together the regular and overtime wages to determine total pay.

$496.80 (regular wages) + $149.04 (overtime pay) = $645.84.

In this example, John should receive $645.84 in total wages, which accounts for the attendance bonus he was entitled to. 

Nondiscretionary bonuses must be included in regular rate calculations. Additionally, the example assumes the $20 bonus applies to this specific week only. If it covered a longer period, the bonus would need to be allocated across those weeks to calculate an accurate weekly regular rate.

Human resources or payroll officers must first determine the period that the bonus covers and it should be accounted for according to that timeframe.

Common challenges when calculating time and a half pay

Calculating time and a half pay sounds simple on paper, but when accounting for federal and state rules, things can get tricky fast. While the overtime rate of 1.5 is straightforward, it’s easy to miscalculate.  Here are some of the common challenges when calculating overtime pay:

Classifying employees correctly

It’s always a question of whether an employee is exempt or non-exempt from FLSA and time and a half pay. Given the typical nature of their work, it’s easy to assume that only hourly employees are non-exempt, but it’s not as clear-cut as that. 

Remember that eligibility for time and a half pay is determined by the wages earned and the nature of the job’s tasks. Even salaried employees can be eligible for overtime, making it crucial to understand the rules and exemptions on the state and federal levels.

Understanding specific state laws

The minimum wage is $7.25 per hour for nonexempt employees under the federal law. However, state-based thresholds can vary quite a bit. For instance, the minimum wage in California is $16, and New York’s is $15. Meanwhile, states like North Carolina and New Hampshire have the same minimum wage as the federal government. 

The fluctuating workweek method also seems like an appealing way to lower overtime costs. However, it has many legal nuances and can be prone to calculation errors. Some states even prohibit it, such as California. 

Companies need to have a firm grasp of both federal and state requirements. In the case of calculating time and a half pay, the higher minimum wage or the rule that would benefit the employee should be applied. 

Accounting for differing pay rates between teams/shifts

Obviously, time and a half pay must be based on accurate pay rates in the first place – this is easier said than done, especially for employees who might receive varying pay rates. With this in mind, you’ll need to calculate time and a half pay rates according to the correct rates for every employee, no matter the team, shift, or role they work in.

Excluding nondiscretionary bonuses in the regular rate of pay

Bonuses, especially those that FLSA considered non-discretionary, should be included in the computation of the regular rate of pay. 

Nondiscretionary bonuses are predetermined in nature, such as attendance bonuses or bonuses for quality of work. Even if the employer has the option not to award the bonuses, it doesn’t mean that these incentives are discretionary. It’s nondiscretionary in nature because the employees are aware of the bonus and have an expectation of how and when they will receive it. 

Automate time and a half computations with Workforce.com

Calculating time and a half pay is not a walk in the park, and it can be daunting to understand the exemptions and rules under the FLSA and state-specific regulations. However, a payroll system like Workforce.com can help alleviate most of the uncertainty that comes with time and a half calculations. Here’s how:

Detailed onboarding checklists

Getting time and a half right starts before payroll even comes into play. It begins with employee classification and accurate pay setup. Workforce.com’s onboarding system ensures that each employee’s classification and pay rates are set up correctly from day one. Plus, it streamlines paperwork like signing contracts, filing W-4s, and submitting employee personal details. 

Accurate time and attendance tracking

When timesheets are accurate, it’s easier to compute wages for employees who work overtime; Workforce.com delivers this and more. As employees clock in and out via kiosk or mobile device, the system automatically generates digital timesheets containing regular hours and overtime hours .

Automated labor compliance

Workforce.com is built with a robust compliance engine that helps you pay staff in accordance with labor laws. In addition to calculating total hours worked and overtime pay, it automatically alerts you to potential conflicts with overtime laws, maximum-hour rules, and fair workweek regulations.

Real-time wage tracking

Workforce.com gives you complete insight into your operations. For example, a robust reporting suite lets you pull reports on daily labor spend across every team and location, letting you easily pinpoint where and when overtime hours occur. 

Alternative rate calculations

Aside from an employee’s regular pay rate, managers can assign alternative rates to teams or shifts on Workforce.com to help manage staff who work multiple roles. Whenever an employee works a specific role, the corresponding “team tag” automatically applies. This setup makes it easy to calculate time and a half pay even when juggling multiple pay rates for every employee. 

Powerful payroll

Because Workforce.com’s payroll system is housed in the same system as onboarding, time and attendance tracking, and employee scheduling, wage and overtime calculations become faster and more precise. With data synchronized across modules, there’s no need for duplicate profiles or manual re-entry. As a result, employees receive accurate paychecks every time.  

One of the best ways to avoid issues with time and a half is to never have to pay it in the first place. Check out our free webinar below to see what you might be missing when it comes to paying out excessive overtime.

Webinar: How to lower your overtime hours

If you want to learn more about how Workforce.com can help you manage your workforce while staying compliant with the FLSA and state-specific laws, book a call today.

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Free overtime calculator

Summary:

  • Overtime refers to any and all hours worked beyond the standard 40-hour work week. According to the FLSA, it should be paid at a rate no less than 1.5x the regular hourly pay rate. – More

  • Only non-exempt employees are eligible for overtime pay – More

  • Miscalculating and underpaying overtime can result in DOL fines lawsuits. Avoid this by using time and attendance software and by running routine audits. – More

Ah, yes, overtime. You probably loved it back in high school working your summer lifeguarding job at the local pool. But flash forward to the present, and it has probably lost some of its luster, becoming more of a necessary evil in your day-to-day business operations.

While it is undoubtedly convenient to have employees stay late or work extra days while short-staffed, this convenience comes at the price of higher labor costs and sensitive calculations.

Luckily, we have a solution for you: the trusty overtime calculator. 

What is overtime?

But wait, let’s back up for a second and clearly define the concept of overtime. 

Overtime refers to any and all hours worked beyond the 40-hour standard work week. According to the DOL, employees “must receive overtime pay for hours worked over 40 in a workweek at a rate not less than time and one-half their regular rates of pay.”

In other words, employees must receive 1.5x their regular hourly wage for working overtime, at minimum. Overtime pay rates vary, however – and herein lies the key difference between overtime and another common term: time and half. 

Overtime vs. time and a half

While overtime is a blanket term referring to the time worked beyond 40 hours in a week, “time and a half” is a specific rate at which overtime pay is calculated. Time and a half is the legal minimum for overtime. 

Overtime pay can also be calculated at higher rates, like double or triple time. Many businesses do this once overtime hours reach a certain threshold, or if the overtime shift occurs during a critical period of the day. 

Who is eligible for overtime? 

Typically, hourly workers who make less than $684 a week, or $35,568 a year, are entitled to minimum wage and overtime protections under the Fair Labor Standard Act. Specifically, they have the right to overtime pay at 1.5x their regular hourly rate. However, the FLSA also deems workers who have limited artistic, scientific, executive, or administrative responsibilities as eligible for overtime as well, regardless of their weekly earnings.

Examples of employees who receive overtime include: 

  • Construction workers
  • Plumbers
  • Mechanics
  • Firefighters
  • Police officers

People who primarily do non-manual work and earn more than $684 a week are generally deemed “exempt” from the FLSA right to overtime. While exempt employees typically hold salaried, white-collar jobs, this is not always the case. 

Read More: Exempt vs. Non-Exempt Employees

How to calculate overtime

In its most basic form, calculating overtime pay is really quite simple. Just take the employee’s regular hourly rate and multiply it by the overtime rate. Then, take the resulting number and multiply it by the number of overtime hours worked. 

For a more in-depth example of how this works, check out our detailed guide to how to calculate time and a half.

For many businesses, computing overtime isn’t always this simple. To get overtime pay right, you first need to determine the regular rate – this becomes much more difficult when dealing with variables like shift differentials, commissions, bonuses, and holidays. One miscalculated bonus or forgotten holiday could throw off an entire overtime computation, landing you in hot water with not only your employee but the U.S. Department of Labor. 

Penalties for getting overtime wrong

Whether intentional or not, miscalculating overtime pay can lead to underpaying your workers – which eventually leads to legal action. 

In 2022, a district court judge in Alabama upheld a $13.2 million lawsuit in favor of some steelworkers. Their employer had not been paying overtime correctly due to the use of a suspect rounding policy that rounded clock-ins and clock-outs down by 30 minutes. 

While the employer of course claimed to be unaware of the mistake, blaming it on their previous lawyer, ignorance is not a valid excuse here. You see, it was found that they had acted in bad faith by not keeping accurate and complete work time records. If they had been keeping complete records, it would have shown they had every intention of following FLSA standards. 

How to avoid overtime lawsuits

The last thing you want is a $13.2 million lawsuit on your hands for making simple computation mistakes. Routine timekeeping miscalculations can add up over the years and result in a significant amount of unpaid overtime that you don’t want on your hands. Here are a couple of the best ways to safeguard against this happening:

Keep accurate and complete wage and hour records

Act in good faith and you’ll have nothing to hide. Keep daily records of hours worked and wages owed so you’ll always have a paper trail to fall back on if the DOL ever comes knocking. 

Also, consider running routine overtime audits. If you catch a mistake, address it quickly before it snowballs into a larger issue. And of course, keep records of these audits to demonstrate a proper intention to abide by FLSA standards. 

For more on this, check out our Q&A with Annette Idalski, a Labor and Employment Trial Attorney and Partner at Seyfarth Shaw LLP.

Q&A: Employers sued for wage and hour violations

Use software to calculate overtime for you

Calculating overtime may be a breeze for one employee, but when you are dealing with hundreds, as well as things like bonuses, vacation hours, and shift differentials, things suddenly become much more tricky.

Overtime needs to be calculated accurately and on time, not just for the sake of your employees, but for the survival of your business. Sure, you can use spreadsheets and phone calculators to figure it all out. But the easier choice is to use dedicated time and attendance software to do the tedious admin work for you. Not only does it automatically track hours of work and compute overtime compensation for you, but it also accounts for any and all overtime laws unique to your region.

A time tracking platform like Workforce.com automatically recognizes when staff go into overtime, quickly flagging and recording these hours alongside regular hours on digital timecards. At the end of the pay period, all you have to do is quickly approve and export these timesheets with a few clicks. Yes, it’s true, paying your employees accurately is that easy. 

If you are ready to get started calculating overtime pay, sign up for a free trial today, or, get in touch with our team.

Or, if you’d like to find out more about how to avoid overtime in the first place, check out our free webinar below:

Webinar: How to lower your overtime hours

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How to do a time audit [3 step guide]

Astronaut Dog Sitting and Working at a Laptop

Summary

  • Check the reliability of your data source: are you using outdated, manual strategies? — More

  • Look out for patterns across your system. Where are things going wrong? Too much overtime? Not enough breaks? Find out. — More

  • Translate your findings into long-term benefits for your business. — More

During the 2021 financial year, the Department of Labor’s Wage and Hour Division awarded more than $230 million in unpaid back wages to US workers and brought almost 25,000 compliance actions against employers. Clearly, it’s never been more important to be on top of your time and attendance data.

The nature of shift-based work makes keeping track of how much time employees are at work a bit more complicated and, therefore, more likely to land employers in hot water with the authorities. The healthcare industry is one such example and has had a number of high-profile cases of recovered back wages.

It can be tempting to view a time and attendance audit simply as a way to check in on employee work hours and ensure that they’re being paid the right amount. That’s certainly one function and a vital one, but a time audit process can do much more. With the right approach, a time and attendance audit offers a regular opportunity to fine-tune your business to boost productivity and time management while making sure the fundamentals are aligned and compliant.

Prioritizing your time audit process and integrating it into your management workflow is crucial since, as we’ve seen, not doing so can come at a high cost. Using time tracking software and following our step-by-step guide, your audit doesn’t have to be difficult or take up a lot of time. 

1. Check your data at the source for basic errors

There’s a useful phrase in the field of computer science that is worth making your audit mantra: GIGO or garbage in, garbage out. It means that the quality of your data outcomes is always dependent on the quality of the data you put in. In time and attendance terms, it means that you can head off a lot of problems by making sure your data is accurate before you do anything else with it.

Some common sources of garbage data include:

  • Outdated time tracking tools that don’t accurately record or verify the amount of time spent at work
  • Ad hoc overtime arrangements that make additional hours beyond the workday hard to verify
  • Paper records or spreadsheets that need to be filled out manually
  • Unapproved timesheets that go straight to payroll without managerial oversight

Taking a fresh look at how you gather, record, and sort your time and attendance data will highlight any weaknesses. Eradicating these bad habits and making sure you’re working from complete and accurate data is essential. Without that reassurance, all the auditing in the world won’t help you.

2. Flag areas that cause consistent problems

Time and attendance data can look overwhelming, even for relatively small companies. Knowing the areas that need the most managerial attention will streamline the audit process without you losing too much time and energy.

Checking your team members’ scheduled hours against actual time worked is a fundamental part of the time and attendance audit process. It is important to treat it as a high-priority task and not take it for granted or give it less attention than it requires. 

Deviations between hours scheduled and worked will identify areas where workers are underpaid, allowing you to redress the discrepancies before they become a legal matter. Attention to this area can also help you keep a close eye on your labor costs by taking control of your time and reducing any time-wasting activities from your daily schedules.

Overtime hours and break premiums are also important to keep track of, as this is where significant variations can occur. Unlike scheduled hours, which tend to come in specific time blocks, overtime and missed breaks are where you’ll find those awkward variations in pay. These variations can trip you up if not properly accounted for.

It’s good practice to design your timesheet templates to highlight key information, such as scheduled vs. worked hours, as well as breaks and overtime, as clearly as possible. Using tools like Workforce.com’s time and attendance solution makes this process much easier through real-time automation. It calculates the period of time worked, overtime rates, and break penalties, amongst other things.   

The easier you make it to maintain oversight of this information, the less chance it will catch you out.

3. Continuously improve with your refreshed data

The final step in the time and attendance audit to-do list is to make sure you squeeze every last drop of useful information out of your data. You’ve done the essentials; now’s the time to dig deeper and do the math to extract the long-term benefits for your business.

A great starting point is to calculate the percentages and statistics for relevant criteria for each pay period. How many shifts were employees on time for? How much overtime was used? Break down the figures further by team, location, or individual employee to spot the specific areas of your business that are falling short of time and attendance expectations — or exceeding them. This is all useful information that goes beyond the immediate need to check payroll accuracy. With this information in hand, you are in a better position to set up an action plan that will help you enhance your team’s time management skills.

You should also make sure that your newly improved timesheet data is accessible to anyone else who needs to use it. Human error is always a possibility, so not only will this make sure all angles are covered, but it will also ensure that the same audited data can be exported directly to payroll or made available to external auditors for tax and accounting purposes.

A time audit is a tune-up for your business

The most immediate benefit of a time and attendance audit is peace of mind knowing you’re not exposing your business to wage and hour lawsuits and that you’re getting the labor you pay for. But the long-term benefit of performing this task regularly is that you develop a rich library of data that helps you identify cost-saving measures and areas for improvement.

If conducting regular time audits is of interest to your business, you should go ahead and read our guide below on establishing a time and attendance system – this is the first step on a path to better time audits.

Whitepaper: Practical Guide to Time & Attendance Management

With features that deliver everything you need for regular, thorough time and attendance monitoring and integrations with your payroll system, Workforce.com can help your business thrive now and into the future. Sign up for a free trial or give us a call to get started. 

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California’s push for a 32-hour workweek explained, and how to prepare

Summary:

  • California is considering a 32-hour workweek bill for businesses with over 500 staff

  • 4 day weeks have been tested in Japan and Iceland with great success

  • Employers could suffer higher overtime and hiring costs as a result of the bill

  • Prepare for a 32-hour workweek by reassessing your workforce management

Californian workers may want to hold off on posting their apartments on Craigslist and hightailing it in UHauls to Austin – a select group of them might be due for a shorter workweek in the near future.

A new bill is currently working its way through the Californian legislature proposing a 32-hour workweek for businesses with over 500 employees. AB 2932 requires that “work in excess of 32 hours be compensated atthe rate of no less than 1 1/2 times the employee’s regular rate of pay.” In addition, all work going beyond 12 hours a day or seven days a week is paid at double an employee’s regular rate of pay.

The bill also prohibits employers from reducing an employee’s regular rate of pay as a consequence of the change in workweek hours. 

Backed by four Democrat cosponsors, the groundbreaking bill would reportedly affect nearly 2,600 Californian businesses. Central to the idealogy behind the bill is that people will work less time while earning the same compensation that came with a traditional 40-hour workweek, all while increasing job satisfaction and productivity. 

While burnt out US workers everywhere are most likely salivating at this legislative development, many businesses owners may have their misgivings – and rightfully so. With a colorful history engulfed in debate over the past few years, the proposed 32-hour workweek in the US deserves to be unpacked a little. 

What’s the upside? 

In light of the “Great Reshuffle” and the persisting labor shortage, it is evident that workers share a growing sentiment of burnout and distaste for the current employment landscape. People are prioritizing pursuits beyond their careers and opting for more and more remote work in the days since the pandemic.

Questions still remain on how to address this national grudge against the traditional 9 to 5, and the 32-hour workweek is just the latest attempt at a solution. Working fewer hours in a week is obviously an attractive prospect and would most likely help return people to the workforce at first glance. 

The 32-hour workweek is nothing new, however. Backed by 4 Day Week Global, workweeks under 40 hours have been pushed in the countries all across the world for years, partially implemented at times with great success. 

Microsoft Japan tested a 4-day workweek for a month in 2019. They saw a rise in productivity, with sales per employee increasing by 40%. They also experienced cost savings with 23.1% less electricity used and 58.7% fewer pages printed. Honestly, I’m surprised that a Microsoft office even printed paper to begin with – well done I guess. 

In Iceland, two combined trials saw 1% of the country’s entire workforce try a four-day workweek from 2015 to 2019. Participating public service and local government organizations had their employees work about 35-36 hours a week. As a result, work-life balance was significantly improved and now 86% of Icelandic people work shorter weeks.

Icelandic workers in the trial also became more productive, eliminating unnecessary weekly meetings and reducing time spent on necessary ones. 

Okay, so it’s looking like three-day weekends in the Cali sun are coming soon to a cubical farm near you, right? 

Not so fast. 

What’s the downside? 

Chief among the concerns for a 32-hour workweek would be the financial burden on employers. The California Chamber of Commerce says that AB 2932 could be a” job killer” and could make hiring and talent acquisition more expensive. 

There is also the issue of who the bill is really benefitting. Only businesses with over 500 employees would be impacted. That means, with businesses totaling around 1.6 million statewide, only 0.2% of Californian businesses would actually get a 32-hour workweek. 

The 32-hour week may only be realistically utilized by white-collar office workers as well, not by frontline people in blue-collar industries as touted by the politicians sponsoring AB 2932. As such, the bill (and the 32-hour workweek more generally) is seen as out of touch and catering to the controlling upper class who can afford to take an extra day off. 

Restaurant workers and emergency responders don’t have this luxury as they face constant and unpredictable demand, on top of a crippling labor shortage. This of course leads to issues in overtime. 

Remember those trials in Iceland I mentioned earlier? Well, among emergency responders, overtime increased with reduced workweek hours. While in other industries, a shorter workweek tends not to lead to any change in overtime, it would be naive to think all industries would benefit the same way from a three-day weekend. 

With the 32-hour workweek bill in California, overtime hours could become a major issue for some businesses, especially if expanded to include smaller businesses on the frontline. Employers will not want to deal with the new 32-hour overtime cut-off as it will most likely raise their labor costs as workers learn to adjust their productivity to fit all work within a four-day window. 

An expensive learning curve to say the least.

Preparing for 32-hour workweeks 

If 32-hour workweeks are indeed about to become the norm in the US, employers will need to adapt. Reassessing workforce management practices is step one. It’s also step two, three, and four. Maybe even five. Managerial areas like scheduling, time tracking, and payroll will all have to become more efficient. Here are the three areas to focus on:

Control labor costs

32-hour workweeks will bring all kinds of labor cost troubles, particularly with overtime. Managers should have their scheduling and time tracking synced so that they receive alerts when employees reach or are approaching overtime. Scheduling software should also help managers avoid overtime and prioritize regular hours. 

Timekeeping systems will need to operate with pinpoint accuracy to mitigate time theft and overspending on wages. Things like geo-fencing, photo identification, and a live time clock feed prove tremendously useful in this area.

Cut back on administrative time

We all spend too much time crunching numbers, sitting in meetings, and managing logistics. With 32-hour workweeks, this needs to change. 

Just as Iceland did, businesses will have to eliminate unnecessary meetings and make important ones more efficient. Meetings are a major time waster for many businesses and will only hinder productivity during a shorter workweek. They need to be faster. 

Scheduling should also be faster – even as fast as a single click. Wasting time on manually filling out rudimentary spreadsheet schedules is an artifact of the 40-hour workweek era. Nobody has time for that. 

Timesheets should also flow much faster into payroll. This can be achieved by auto-approving correct timesheets and flagging those with discrepancies. Approving time and correcting errors shouldn’t last ages; it needs to be done in the blink of an eye so payroll can do its job and businesses can keep things moving. 

Increase productivity

Employers should use demand data, labor forecasting, and employee preference metrics to quickly build out shifts to maximize productivity, lower wage costs, and keep people under 32 hours a week. Blindly scheduling employees for shifts without seeing these metrics right in front of you increases the risk of placing employees where they aren’t needed or where they aren’t as productive. 

Managers should also work to save time and money when replacing open shifts last minute. Use a simple shift replacement tool via mobile app to help fill open shifts with the most cost-effective employees, while also letting employees quickly swap shifts between themselves.

 

It remains to be seen whether or not California passes the 32-hour workweek bill. If it does, one can only assume more states will follow. In the meantime, please continue to drag yourself out of bed on Fridays and push the Sisyphean boulder up the hill. 

Shorter workweeks are on the horizon. Your workforce management needs to adjust. Reach out to us to find out more about how to increase productivity and reduce wasted time. 

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Logistics company ordered to pay $120K for wage and hour violations, must implement timekeeping system

timeclock, wage and hour, schedule, timesheet rounding

A Southern California logistics provider was ordered to pay $120,000 in overtime back wages to 388 employees and also must implement a timekeeping system to shore up compliance issues.

Following a recent finding of the Department of Labor affirmed by a federal court in California, an additional $2,000 penalty also was assessed to the employer, Global One Logistics, by the department’s Wage and Hour Division to address the employer’s willful violations of the Fair Labor Standards Act. Employees were told to record only eight hours of labor each day regardless of how many hours they actually worked, according to a May 24 Labor Department press release.

Maintain accurate timekeeping

The court ordered Global One Logistics, which provides warehousing and distribution services for the home fashion and apparel industry, to implement a reliable timekeeping system that allows each employee to accurately record their daily start and stop times, the Labor Department stated. The order also instructed the employer to not alter or manipulate time or payroll records to reduce the number of hours actually worked and not to encourage or pressure workers to underreport hours worked, the statement said.

Aimee Delaney, partner at law firm Hinshaw & Culbertson, said that while the timekeeping order is not unusual, the FLSA places an obligation on employers to maintain accurate time records for its employees. It does not dictate a specific method, but there must be accurate records maintained, she said. 

“Digital time and attendance systems do deter manipulating time and payroll records, particularly if you are comparing to handwritten timesheets,” Delaney said.

 ‘Willful’ wage and hour violations

Investigators found the employer willfully failed to pay employees overtime at time-and-one-half their regular rates of pay when they worked more than 40 hours per week, according to the Labor Department. In addition to requiring employees to falsify the number of hours they worked each day, the employer also paid for the unrecorded hours in cash at workers’ straight-time rates, the Labor Department stated.

A “willful” violation under wage and hours laws has specific meaning and consequences, said Delaney. If a violation is found to be willful, the statute of limitations for the claim goes from two to three years and there are additional penalties, such as the $2,000 levied against the employer, she said.

Aimee Delaney, wage and hour violation
Aimee Delaney, partner at law firm Hinshaw & Culbertson.

“When used in the FLSA context, a violation is willful if the employer either knew or showed reckless disregard for whether its conduct was prohibited by the FLSA,” Delaney said.

Employers who purposefully manipulate payroll records in an attempt to avoid their legal obligations will be held accountable by the Labor Department, said Wage and Hour Division Assistant District Director Rafael Valles in West Covina, California.

“The outcome of this investigation serves as a reminder to all employers to review their pay practices to ensure they comply with the law and as a reminder to workers that they have the right to be paid for all of the hours that they work.”

Compliance is an organizational responsibility

Minimizing the risk of wage and hour and overtime violations falls on several departments and various roles within the organization. Managers in particular often are on the frontline with workers and should be familiar with compliance and timekeeping requirements.

“They know and are often the assigner and approver of overtime,” Delaney said. “Managers certainly bear a responsibility for knowing the state and federal requirements and not directing employees to do something out of compliance with those requirements.” 

Human resources and payroll departments often have higher-level oversight and compliance responsibilities. HR may not always be aware of specific timekeeping violations occurring day to day but can ensure that managers are properly trained. 

Also read: Using software to simplify payroll and overtime

“HR should also be aware if unusual or significant hours are being worked, which may prompt a review or audit to ensure employees working the additional hours are properly paid,” Delaney said. “Payroll is often simply a function of processing pay for what is reported on the time records. However, payroll certainly has a role to play in ensuring that all reported hours are paid correctly, including the correct overtime premiums.”

Labor Department enforcement

Delaney also pointed out that “off the clock” violations are among the clearest abuses of state and federal wage and hour laws.

“It literally means you are requiring the employees to work while not recording their time, which means they will not be paid,” she said. “Under the FLSA, non-exempt employees must be paid for all hours worked. Employers also have an obligation to maintain accurate time records.”

She added that this case isn’t necessarily a predictor of tougher Labor Department enforcement of wage and hour laws. The violations presented in the facts were blatant violations of fairly established wage and hour rules, she said. 

“Once violations are found, the Labor Department is always going to ensure enforcement to get the employees paid the wages owed,” she said.

Time and attendance software takes the headache out of tracking your hourly employees. Workforce.com has automatic systems in place to help you streamline your processes, save time and protect your bottom line. Book your demo today.

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Oilfield pipeline inspectors working across 40 states awarded $3.8M in back wages

timeclock, wage and hour, schedule, timesheet rounding

FIS Holdings LLC, a pipeline inspection company based in Sand Springs, Oklahoma, was fined $3,852,968 after violating overtime requirements of the Fair Labor Standards Act for 1,100 of its employees, a Labor Department investigation discovered.

The oil and gas industry depends on independent inspection companies like FIS Holdings to protect this essential infrastructure. The employees, who work in 40 states ranging from Massachusetts to California and Idaho to Alabama, keep more than 2.6 million miles of pipe in the U.S. secure, the Labor Department said in an April statement.

Investigators discovered that the company, which does business as Frontier Integrity Solutions Operations LLC and operates in the U.S. and Canada, paid workers a fixed amount per day, regardless of the number of hours that they worked. The practice resulted in violations when employees worked more than 40 hours in a workweek, but the employer failed to track those hours or pay workers overtime.

The employees typically worked between 50 and 60 hours per week. The employer’s failure to keep records of the number of hours employees worked also resulted in recordkeeping violations, the Labor Department release stated.

Kate Bischoff, an employment attorney at tHRive Law & Consulting LLC, said that managing employees’ time and attendance across multiple states shouldn’t necessarily complicate the process. The employer wasn’t following federal law for tracking time and paying overtime, she said. And that responsibility cuts across the entire organization, not just a single department like human resources or payroll.

“Everyone needs to play a part in compliance,” Bischoff said. “Frontline managers are important to get accurate time records from each employee. Payroll needs to verify, compile data including deductions, and ensure pay stubs are accurate. And, HR needs to make sure everyone has the tools and knowledge to do their jobs accurately.”

Many employers are looking for ways to make payroll as easy as possible, including paying fixed rates to non-exempt employees, misclassifying workers as independent contractors, and not requiring employees conduct paperwork when their actual work is dangerous, Bischoff said.

Bischoff pointed out that the investigation wasn’t handled by one office and one investigator but was a much bigger effort by multiple field offices to get the outcome for FIS employees.

Also read: Federal contractors fined $293K by Labor Department for wage violations

Bischoff said it’s clear that the Labor Department is focusing on enforcement over guidance. 

“The Biden administration’s Department of Labor under Secretary Walsh is going to focus on enforcement as a major motivator for employers to get their wage and hour houses in order,” she said.

Bischoff advised employers to talk with their attorneys and their technology vendors to ensure compliance before a Labor Department investigator comes knocking. 

“The Department of Labor’s focus on enforcement is designed to be a deterrent for all employers to motivate them to comply with the law,” she said. “Work with an attorney to really focus on making sure your I’s are dotted and T’s are crossed on wage and hour issues.”

Book a demo today to see how to build schedules, manage labor costs and ensure labor compliance with Workforce.com’s No. 1 employee scheduling software.

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Federal contractors fined $293K by Labor Department for wage violations

federal contractors, mask, mail

Contractors have to follow a rigorous array of compliance requirements to do business with the federal government, or they risk losing their deals.

Private mail carriers contract with the federal government to help deliver mail across the nation. While they may have delivered parcels and letters on time, three Florida-based federal contractors failed to deliver all of their workers’ wages, which caught the attention of the U.S. Department of Labor.

Following its investigations, the Labor Department’s Wage and Hour Division determined that three mail haulers in northern and central Florida — Mercado Santiago Inc. in Middleburg, Copa Post Services LLC in Gainesville and M&M Superior Contracting LLC in Orlando — owed a total of $293,779 to 34 employees. All three employers violated requirements of the McNamara-O’Hara Service Contract Act, according to a Labor Department statement. The Act is a labor law that requires government to use its bargaining power to ensure fair wages for workers when it buys services from private contractors. 

Substantial fines for wage and hour violations

Kate Bischoff, an employment attorney at tHRive Law & Consulting LLC, said it’s a sizable penalty in a wage and hour case.

“This averages out to about $8,700 per employee, which is no small amount,” Bischoff said. “Depending on the length of time the Wage and Hour Division was looking back, employees would have felt the absence of this amount. It would have been real to them.”

Division investigators found one employer, Mercado Santiago, failed to pay workers for all the hours that they worked, resulting in the contractor paying less than the prevailing wage rates required. They also said the employer failed to pay required health and welfare benefits for employees and failed to keep accurate time and payroll records. As a result, Mercado Santiago has paid $219,166 in back wages to 16 employees.

Bischoff said it’s unlikely that the pay issue was an oversight by Mercado Santiago.

“Over $13,000 in wages and benefits is significant,” she said. “While prevailing wages are tricky — so much attention to detail and coordination between workers, supervisors and managers — it would be hard not to notice the issue here. Plus, if certified payroll was checked regularly by the government’s contracting officer, it should have been easy to spot the issue.”

Also read: Wage and hour violations cost restaurant $697K

Investigators determined Copa Post Services also failed to pay required health and welfare benefits to workers. The employer has paid $25,848 in back wages to 10 employees, according to the Labor Department statement.

The division found M&M Superior Contracting failed to pay required prevailing wage rates. The employer also failed to pay required health and welfare benefits and holiday pay to workers, and failed to allow employees to accrue vacation time or vacation pay. The employer owes $48,765 in back wages to eight employees, according to the Labor Department statement.

“Prevailing wage laws provide a safety net for fair wages and benefits to workers on contracts providing services to the federal government. Enforcement of these laws protects the wages of American workers,” said Wage and Hour Division District Director Wildalí De Jesús in Orlando in the statement. “The Wage and Hour Division will remain vigilant in its work to ensure employees are paid in compliance with these laws, and that employers compete on a level playing field.”

In April 2013, the U.S. Postal Service awarded Mercado Santiago a contract to provide mail-hauling services in Duval, Clay and St. Johns counties. The contract expires in September 2022, the statement said. Copa Post Services hires employees to work at USPS locations delivering mail on SCA contracts in Alabama, Florida and Georgia. M&M Superior Contracting holds three separate SCA contracts to deliver mail for the USPS in Orlando.

Stricter wage and hour enforcement is coming

Bischoff predicted that under new Labor Secretary Martin Walsh, enforcement is going to ramp up, penalties will likely increase and the Labor Department may have a low tolerance for mistakes. 

“It is more likely the department will go straight to litigation before seeking to settle a dispute,” Bischoff said. 

This could also mean the Labor Department will seek more debarment as a penalty, she added. Debarment means an employer is prohibited from contracting with the government.

“For many, many contractors, debarment is an existential threat,” she said. “These employers were contracted to carry the mail. If they don’t have a contract with the USPS to carry mail, it is hard to imagine what they would do.”

To avoid wage and hour violations, Bischoff said employers need to act quickly to get wage and hour compliance in order.

“With possible changes to the overtime salary threshold, minimum wages and more enforcement action, there is never a dull moment for HR and payroll professionals,” Bischoff said.

Book my demo today so I can see how to build schedules, manage labor costs and ensure labor compliance with Workforce.com’s No. 1 employee scheduling software.

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Labor Department fines, penalizes contractor $100K for falsified overtime records

employment law, labor law, overtime records

Recent wage and hour violations by a New Hampshire contractor is a signal to other employers that they should review their workforce management policies and overtime records for compliance with federal, state and local labor laws.

Facades Inc., a commercial exterior surfaces applicator-installer in Hampstead, New Hampshire, falsified pay records to cover up its failure to pay employees the required overtime wages they earned, according to a U.S. Department of Labor investigation.

The Labor Department’s Wage and Hour Division recovered $87,360 in back wages owed to 28 Facades Inc. employees. It also assessed a civil money penalty of $19,516 to address the willful nature of the violations, which included the employer’s falsification of payroll records, according to a DOL press release.

Check your workforce management policies

Small business owners have numerous priorities, and accurately managing payroll and time and attendance policies should always remain at the top, as the Facades case shows. Effectively tracking employee hours with an automated workforce management solution will clean up compensation and support compliance practices.

Investigators found Facades Inc. violated the Fair Labor Standards Act when it paid straight time for overtime hours worked by employees and concealed those payments as “reimbursements” in payroll registers. Rather than recording and paying for overtime hours at time-and-one-half workers’ regular rates of pay, the employer recorded only up to 40 hours in their records and masked their straight time payment for any additional hours, the release stated.

“Workers deserve to get paid all the wages they have earned, and our enforcement of the law ensures that happens,” said Wage and Hour Division District Director Daniel Cronin in Manchester, New Hampshire. “In this case, the employer attempted to conceal illegal straight-time-for-overtime payments. In addition to being held accountable for back pay, the employer paid a significant civil money penalty. Other employers should use the outcome of this investigation as an opportunity to review their own pay practices to avoid violations like those found in this case.”

Automate your processes to avoid penalties

Employees deserve their paychecks on time and to be accurately compensated for the time they spend working. Automated payroll practices help eliminate delays, improve compliance and minimize costly errors.

With employment contracts, timesheets, benefits and labor laws, there are a lot of factors involved in payroll that can result in miscalculations. Workforce.com’s payroll integration solution connects with more than 50 payroll systems to ease compliance and enhance efficiency. 

Ask for a demo of Workforce.com’s powerful time and attendance platform today and see how to make workplace compliance effortless and effective.