Best Ways for Employers to Handle Wage and Hour Compliance
Human resources departments across the country are faced with compliance challenges day in and day out and one of the most common HR compliance mistakes involves local labor laws that are applied to work hours, wages, and overtime pay. We understand the challenges that you face when it comes to HR compliance here at Cahue Enterprises HR Consulting, Inc. and we want to help you avoid key mistakes with a quick overview of the best ways for employers to handle wage and hour compliance.
Top 3 Ways to Remain Compliant with Wage and Hour Laws
HR wage and hour compliance is built around the Fair Labor Standards Act (FLSA) in the United States that prescribes a standard minimum wage and overtime pay regulations for exempt and non-exempt employees. HR compliance mistakes that can be applied to wage and hour laws cover a lot of ground and it is important that you know what to be aware of in order to remain compliant.
The most common mistakes with wage and hour regulations include misclassifying employees as exempt, non-exempt, or as independent contractors, reduced pay for poor performance, reduced pay for shorter breaks or lunches, not paying employees for training, travel, or meetings, and not having the proper records for employee hours and wages.
Here is a better look at how you can remain compliant with wage and hour laws.
1. Know and Understand Wage and Hour Laws in Your Area
The first step in handling wage and hour compliance within your company is to know and understand the wage and hour laws in your location. The FLSA promises a minimum wage of $7.25 for hourly, non-exempt employees — but that is at the federal level. Many states across the United States have instituted their own minimum wage laws that you need to be aware of. For example — California instituted a $16.00 minimum wage in January 2024, Illinois has a $14 minimum wage, and Florida has a $13.00 minimum wage starting in September 2024.
In addition to state and federal minimum wage laws, there are many cities and counties across the United States that have specific minimum wage requirements in place. Los Angeles County has a minimum wage of $17.27. Minneapolis has a minimum wage of $15.57 for smaller companies and there are more across the country. To avoid HR compliance mistakes with wage and hour laws, it is vital that you know and understand these requirements and regulations in your area and are aware of future changes that could result in mistakes.
2. Conduct a Self-Audit of Your Company
A self-audit of your wage and hour compliance is a great way for you and your company to avoid mistakes. Recent changes to the Fair Labor Standards Act in March 2024 made additional distinctions about the differences between employees and independent contractors that may impact many businesses in the current economy. Updates like this make it important for HR departments to conduct annual self audits to ensure no mistakes are made and that any changes to the law are reflected by your payroll. Audit your payroll practices, salary levels, salary deductions for partial days, and any changes to standard salary-basis tests to remain compliant.
3. Employ a Good Timekeeping System and Software
The modern, post-pandemic economy has seen an increase in remote employees, hybrid employees, and independent contractors, and tracking their hours and wages is more important than ever. A reliable timekeeping system is an important tool to have in your HR toolbox that can help you avoid compliance mistakes down the road.
Innovative timekeeping systems use creative login methods that help companies keep better track of employee hours and that create an hours log for future audits. Software is available for remote and hybrid employees that can track user activity and help you monitor work hours, break times, and more. Timekeeping technology is important for the fact that it protects the company and employees and it is important that HR departments find timekeeping software that can be tailored to the unique needs of your company.
READ MORE: Differences Between Employees and Independent Contractors
Are you looking for better ways to prevent wage and hour compliance mistakes? Cahue Enterprises HR Consulting may be able to help with this quick list of the best ways to handle wage and hour compliance.
Contact Cahue Enterprises today for a consultation!
Human resources departments across the country are faced with compliance challenges day in and day out and one of the most common HR compliance mistakes involves local labor laws that are applied to work hours, wages, and overtime pay. We understand the challenges that you face when it comes to HR compliance here at Cahue Enterprises HR Consulting, Inc. and we want to help you avoid key mistakes with a quick overview of the best ways for employers to handle wage and hour compliance.
Top 3 Ways to Remain Compliant with Wage and Hour Laws
HR wage and hour compliance is built around the Fair Labor Standards Act (FLSA) in the United States that prescribes a standard minimum wage and overtime pay regulations for exempt and non-exempt employees. HR compliance mistakes that can be applied to wage and hour laws cover a lot of ground and it is important that you know what to be aware of in order to remain compliant.
The most common mistakes with wage and hour regulations include misclassifying employees as exempt, non-exempt, or as independent contractors, reduced pay for poor performance, reduced pay for shorter breaks or lunches, not paying employees for training, travel, or meetings, and not having the proper records for employee hours and wages.
Here is a better look at how you can remain compliant with wage and hour laws.
1. Know and Understand Wage and Hour Laws in Your Area
The first step in handling wage and hour compliance within your company is to know and understand the wage and hour laws in your location. The FLSA promises a minimum wage of $7.25 for hourly, non-exempt employees — but that is at the federal level. Many states across the United States have instituted their own minimum wage laws that you need to be aware of. For example — California instituted a $16.00 minimum wage in January 2024, Illinois has a $14 minimum wage, and Florida has a $13.00 minimum wage starting in September 2024.
In addition to state and federal minimum wage laws, there are many cities and counties across the United States that have specific minimum wage requirements in place. Los Angeles County has a minimum wage of $17.27. Minneapolis has a minimum wage of $15.57 for smaller companies and there are more across the country. To avoid HR compliance mistakes with wage and hour laws, it is vital that you know and understand these requirements and regulations in your area and are aware of future changes that could result in mistakes.
2. Conduct a Self-Audit of Your Company
A self-audit of your wage and hour compliance is a great way for you and your company to avoid mistakes. Recent changes to the Fair Labor Standards Act in March 2024 made additional distinctions about the differences between employees and independent contractors that may impact many businesses in the current economy. Updates like this make it important for HR departments to conduct annual self audits to ensure no mistakes are made and that any changes to the law are reflected by your payroll. Audit your payroll practices, salary levels, salary deductions for partial days, and any changes to standard salary-basis tests to remain compliant.
3. Employ a Good Timekeeping System and Software
The modern, post-pandemic economy has seen an increase in remote employees, hybrid employees, and independent contractors, and tracking their hours and wages is more important than ever. A reliable timekeeping system is an important tool to have in your HR toolbox that can help you avoid compliance mistakes down the road.
Innovative timekeeping systems use creative login methods that help companies keep better track of employee hours and that create an hours log for future audits. Software is available for remote and hybrid employees that can track user activity and help you monitor work hours, break times, and more. Timekeeping technology is important for the fact that it protects the company and employees and it is important that HR departments find timekeeping software that can be tailored to the unique needs of your company.
READ MORE: Differences Between Employees and Independent Contractors
Are you looking for better ways to prevent wage and hour compliance mistakes? Cahue Enterprises HR Consulting may be able to help with this quick list of the best ways to handle wage and hour compliance.