70% of firms unintentionally violate pay laws: Here's help

You’ll want to huddle with Benefits to take a closer look at your wage-and-hour practices sometime soon.

Reason: Wage-and-hour lawsuits are the fastest-growing type of employment litigation in the workplace right now.

And the Department of Labor (DOL) estimates that 70% of employers routinely violate wage-and-hour laws – albeit often unintentionally.

Given these circumstances, it’s no wonder many experts believe pay lawsuits pose the greatest employment litigation threat to American businesses today.

One way to safeguard your firm: periodic in-house audits of your pay practices. Focusing on these two areas can help you uncover any problems before it’s too late:

1. Recordkeeping practices. Of course, you know when an employee’s workweek begins, his/her regular hourly rate of pay, etc. But many companies forget to keep a written record of these things, which can come back to bite them in the event of an audit.

Here’s a checklist of some of the info you must keep a written record of:

• the hour and day the workweek begins
• total hours worked per day/workweek
• employees’ regular hourly rate of pay, and
• the amount overtime worked in a week.

2. Exempt vs. non-exempt duties. Employers often fall into the trap of forgetting to review employees’ job descriptions frequently. And the problem is job duties evolve over time, and employees who were once classified properly may need to be reclassified.

Best bet: Review formal job descriptions and then compare them to what employees are actually doing day in and day out. Then reclassify as necessary.