Where is the Mistake- Payroll RecordsApr 21, 2023
Where is the mistake? Looks fine, right? Think again...
This is a recreated example of my client Company's payroll record. The Company, a Florida business, relied on its payroll company to create payroll records, and assumed it was being handled correctly. The Department of Labor is currently investigating and I was retained to represent the company during the investigation.
Where is the mistake and what should the company have done differently?
Problem #1: The pay period covers a 2 week period and notes 80 hours per week were worked. However, does this mean the employee worked 40 hours and 40 hours, or 48 hours and 32 hours? The payment to an hourly non-exempt employee would be different in these two scenarios.
Problem #2: The biweekly hours are all the same, and are all rounded even numbers. It is unlikely that this employee worked exactly 40 hours per week, and did not work 39.5 hours one week and 38 hours the next. Therefore, the documentation does not seem reliable, which opens the door to potential claims of unpaid wages and overtime.
Finally, the Department of Labor requires companies to keep records that show (1) the hours worked each day and (2) total hours worked each workweek. If the company does not maintain these records, there could be an issue in the event of an audit.
When hiring companies to pay and manage your employees, it is important for Businesses to know the law and what to look out for in order to best protect itself from employment claims.
Florida business owners should schedule a consultation with employment counsel to help ensure they are complying with all the important employment laws.
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