Every US company is obliged to track the time of the employees to stay compliant with the Fair Labor Standards Act from 1938. But there is much more than the time tracking in the act.
In the previous article, we delivered a leap into the European legal framework around time and attendance tracking. While in the EU and other European countries it was not obligatory to track time, the situation is vastly different in the US, where the Fair Labor Standards Act made time tracking obligatory since before the Second World War.
Fair Labor Standards Act 1938 history
The act was one of these revolutionary pieces of law that transformed society in a way unseen before. Apart from the obligation of tracking the working time and keeping the time record, the act brought numerous improvements to the existing legal framework, including:
The minimum wage to be paid to the employee,
The limit of 40 hours per working week, with an obligation to pay 150% rate for overtime,
The employment of children under 18 years of age in manufacturing and heavy labor was forbidden,
The employment of children under 16 years of age during school hours was forbidden.
President Franklin Delano Roosevelt called the act “the most important piece of New Deal legislation since the Social Security Act of 1935”.
Interestingly, the year 1938 was not the first to bring the initiative of regulating the working time and employee’s rights. In 1932 senator Hugo Black came up with an idea of a 30-hours working week, yet it met fierce resistance. Thus, the law had to wait and has been modified with additional ten hours of work per week to meet the expectation of every party.
Are timesheets a legal requirement – the basics
The Act has been here since 1938 yet there were multiple amendments and updates since then. Nowadays, the act has evolved into the cornerstone of the employer-employee relationships, with several exclusions – volunteers and free contractors just to name the most important of them.
This guide shows only the time and attendance tracking requirements from the federal law. The source document delivers more detailed information on the matter and statements regarding other aspects of fair labor.
The basic wage standards – the employee must be paid at least $7.25 per hour worked. There are no holidays, paid time off or mealtime included and the employee gets paid only for hours worked. Yet to pay or pay not, the employer needs to track the breaks and time-offs as well.
Tipping – if the employee is receiving tips during the work worth more than $30 by month, the employer may decide to count the tips into the wage and pay a lower base salary. Nevertheless, the employer needs to pay at least $2.13 of hourly wage. If the tips and the wage combined don’t stack to the minimum wage, the employer’s duty is to deliver the missing part. Thus, apart from tracking the time, the employee and employer need to keep the records of tips to stay compliant.
Labor laws on clocking in and out – the paperwork
The act specifies the information that needs to be tracked and kept, yet it gives the employer the liberty to choose the most suitable form. Thus, there is no need for an international enterprise to keep the paper and hand-signed sheets for every employee or for a two-person workshop to implement an enterprise-class software.
To keep compliance with the act the documents need to include:
personal information, including employee’s name, home address, occupation, sex, and birth date if under 19 years of age;
hour and day when the workweek begins;
total hours worked each workday and each workweek;
total daily or weekly straight-time earnings;
regular hourly pay rate for any week when overtime is worked;
total overtime pay for the workweek;
deductions from or additions to wages;
total wages paid each pay period; and
date of payment and pay period covered.
Special information is required for:
employees working under uncommon pay arrangements,
for employees to whom lodging or other facilities are furnished,
employees receiving remedial education.
How to clock in at work in a legal way
Considering all the above, keeping the records is painstaking at least if there are more than a bunch of employees. With the growing number of people working for and with the company, the duty becomes a burden.
Calamari is both compliant and easy to use, significantly reducing the hassle with time and attendance management. The software enables the company to keep the data in an actionable and compliant way at once.
Read our HR blog to find out more about time tracking and leave management. And if you wish to talk about the possibilities and features of Calamari that will make your life easier, don’t hesitate to contact us now!