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Does my Business Have to Keep Records of Hours Worked?

As an employer, you might often find yourself asking, “Do I really need to maintain a record of my employees’ hours?” In short, the answer is a resounding “Yes!” Let’s delve deeper into why this seemingly bureaucratic procedure is so vital.

FLSA

The Fair Labor Standards Act (FLSA), a pivotal federal law, mandates employers to track the hours worked by each non-exempt employee. This regulation extends to all non-exempt employees, whether they’re hourly or salaried. If your employees aren’t classified as “exempt” from minimum wage and overtime pay requirements, documenting their work hours becomes a non-negotiable aspect of your managerial role.

Typically, employers utilize paper or digital timesheets to record each non-exempt employee‘s work start and end times. Every minute clocked-in matters and a timesheet becomes a critical document, a testament to your employees’ hard work.

Now, you might wonder about the frequency of these records. Does the FLSA mandate daily, weekly, or monthly tracking? The answer leans towards a weekly format. Except for a few specific industries, like healthcare, you’re required to keep your employees’ time on a weekly basis. The rationale behind this is simple yet profound – the FLSA measures a 40-hour workweek individually, not over an extended period.

For instance, imagine a situation where an employee works 20 hours in the first week and 60 hours in the second week. In this scenario, you cannot average the two weeks and claim a 40-hour workweek, thereby sidestepping overtime pay. This approach is fundamentally incorrect, and more importantly, against FLSA guidelines. The correct interpretation would be that your employee worked an additional 20 hours in the second week, which must be compensated as overtime.

Consequences of not keeping hours records

Misunderstanding or neglecting these guidelines can lead to costly legal issues and potentially damage your relationship with employees. This is why accurate record-keeping is crucial. It’s not just about adhering to FLSA requirements; it’s about demonstrating your commitment to fair compensation and fostering trust with your employees.

The process may seem daunting, especially for small businesses and startups, but there are resources available to help you navigate this landscape. External business check-ups can be instrumental in reviewing your records, identifying potential issues, and providing guidance to ensure your business remains FLSA compliant.

Remember, maintaining accurate records of hours worked isn’t merely a legal obligation; it’s a testament to your ethical business practices. It conveys a powerful message to your employees that their time, effort, and contribution are valued and acknowledged, ultimately fostering a conducive and fair work environment. So, keep those timesheets updated, and rest assured, your business is on the right track.

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