Payroll Quiz: Stay on Top of FLSA rules

Payroll professionals may assume that complying with IRS regulations is enough to keep their companies out of trouble.

That’s not the case — there are a number of requirements under the Fair Labor Standards Act (FLSA) enforced by the Department of Labor (DOL) that companies need to stay on top of, too. IRS guidelines overlap in many cases but there are key differences — such as records retention — in what the two federal agencies require.

Keeping accurate records isn’t just a good idea – it’s the law. FLSA requires that your data be complete and accurate.

Check that Payroll Knows the Score on FLSA

Test your staffers’ knowledge of the FLSA’s recordkeeping provision by having them answer True or False to the following statements. Then scroll down for the answers:

1. You must keep records of hours worked by both exempt and nonexempt employees.

2. Although the IRS requires you to keep personal information about employees, such as their Social Security Number, the DOL doesn’t.

3. Your records don’t have to include an hourly rate of pay.

4. Time cards must be kept for two years, as must wage rate tables, work and time schedules, and additions to and subtractions from an employee’s wages.

ANSWERS TO THE QUIZ

1. False. The law requires payroll data to be kept for nonexempt employees. But if an employee has been misclassified as exempt, you could be penalized for not having proper records for that person.

2. False. An employee’s Social Security Number must be on file along with other personal data, such as the employee’s sex and birth date.

3. True. If the employee is paid by the hour, include that amount. If you pay that person on another basis, such as by the piece, include the correct data.

4. True. Other information, such as collective bargaining agreements, must be kept for three years.