Seconds Matter: Accurate Time Tracking for Compliance with the Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) in the United States and the Fair Work Act in Australia set various standards for employment practices, including minimum wage, overtime pay, and child labor regulations. The FLSA and Fair Work Act also require a number of actions around time tracking, including that employers keep accurate records of employees' hours worked, wages paid, and other relevant information. This ensures that employees are properly compensated and that the employer complies with FLSA regulations.

While many of the requirements mentioned in the FLSA and Fair Work Act are fairly straightforward, there remains plenty of opportunities for small, unintentional mishaps to put employers out of compliance. This puts the companies at risk of litigation and significant fines. 

The Time at Which a Clock-in or Clock-Out Event is Captured

In order to comply with the FLSA and Fair Work Act, hourly employees are required to be clocked in to complete any job-related tasks, including any that may exist as part of the clock-in process itself. This could include receiving and confirming work assignments at the time clock, reading and acknowledging compliance and attestations while clocking in or out, or completing required temperature or alcohol checks before a shift. 

While those tasks may only take a few seconds, that time compounds quickly over the course of several clocking events per day, every day. And that can ultimately add up to many hours worth of incorrectly captured clock ins and thousands of dollars in unpaid wages. 

In order to ensure that its customers are in compliance with FLSA and Fair Work Act requirements around time tracking, NoahFace captures clock-ins at the moment of identification, ensuring that any subsequent tasks related to clocking in are completed on the clock. On the flip side, clock outs are not captured until all end-of-shift tasks are completed to ensure the same. 

Why It Matters

While most of the tasks will only require a few seconds at each clocking event, over the course of up to 8 clocking events a day including break & meal periods, multiplied by an entire workforce, these seconds can easily add up to equate to thousands of dollars in unpaid time if not captured correctly. 

And such mistakes can be exponentially more costly than the real cost as employers could be subject to lawsuits and other litigation around unpaid time and inaccurate employee time tracking records. 

For instance, in 2019, Dine Brands Global, the parent company of Applebee's and IHOP, settled a lawsuit for $8.5 million. The lawsuit alleged that the company violated the FLSA by not properly paying employees for overtime and not keeping accurate records of hours worked.

In 2017, Chipotle settled a class-action lawsuit for $2.2 million. The lawsuit alleged that the company violated California labor laws by not properly compensating them for all hours worked.

McDonald's has faced numerous lawsuits and allegations related to wage theft and labor violations. While many of these cases are ongoing, they highlight issues such as not paying employees for all hours worked and not providing proper meal and rest breaks. 

And these examples represent just a few of the cases that have come about in recent years from inaccurate time tracking. By ensuring that hourly employees are being paid for all work completed - including seconds that can quickly add up to minutes and hours - companies can better protect themselves and ensure compliance with the Fair Labor Standards Act.