FLSA Allows for Various Timekeeping Methods

Q. We have a new payroll system that will allow employees to clock in from their phones. Are there any concerns about having nonexempt employees clock in and out from personal mobile phones?

A. In addition to setting federal minimum wage and overtime standards, the Fair Labor Standards Act (FLSA) sets recordkeeping provisions for employers. The record keeping standards require each employer to maintain records for each non-exempt employee, including identifying information, hours worked and wages earned. Employers are required to keep payroll records for at least three years, and have available on site at the employer’s central records office for at least two years, all records on which wage computations are based. Typically, this includes timecards, wage rate tables, schedules and records of deductions.

While most of the FLSA record-keeping requirements are specific, its requirements for timekeeping methods are not as precise. Employers are generally allowed to use any timekeeping method they choose. The U.S. Department of Labor Wage and Hour Division fact sheet on the subject simply states that an employer “may use a time clock, have a timekeeper keep tract of employee’s work hours, or tell their workers to write their own times on the records.” This is very broad and gives each employer the discretion to adopt the best practice for its business. The only requirement is that the chosen method is complete and accurate.

As long as the phone application your employees use to clock in allows for complete and accurate records of the hours an employee works each day, there should be few concerns. Of course, with the company relying on the employee to use the application consistently, I recommend that you work with your information technology (IT) department to set up training sessions for your employees. I also recommend that you make available for the employees a self-help guide and a FAQ resource for the application so that they have additional resources beyond the IT department. You will also need to provide an alternative or back-up method to record start and finish times for those employees without a phone or cellular service, or for times when the application might be unavailable. Finally, you will want IT to test the application and ensure that the company can capture the information entered daily and that it includes notifications to the company and employee when an employee misses an entry, or an entry is incomplete.

Jason R. Mau is an attorney in the Boise office of Parsons Behle & Latimer. He can be reached by calling 208-562-4898 or by sending an email to jmau@parsonsbehle.com.

 

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