The federal government created the Fair Labor Standards Act (FLSA) to ensure American employees receive the pay they deserve. It also covers other issues related to the workforce and employment. Any business needs to fully understand the FLSA and ensure they stay in compliance with its regulations. The risks of non-compliance include a variety of penalties, causing an adverse effect to any organization’s reputation.
The FLSA includes a host of policies related to employment, covering minimum wage, overtime pay, child labor, and more. At the same time, these regulations continue to evolve, requiring businesses to spend time keeping up with any changes. Staying in compliance also demands companies develop rigorous processes for recording the time worked by each employee. These records also need to be maintained for a certain period of time.
Staffing agencies and their clients benefit from leveraging a modern time-tracking solution to ensure FLSA regulatory compliance. Let’s examine a tool at the leading edge of time collection software and how it modernizes time tracking. We also cover how each feature of this tool handles different aspects of the FLSA regulations.
What Should Employers Know About The Fair Labor Standards Act?
A Closer Look at the Fair Labor Standards Act
Let’s provide a high-level overview of the various parts of the FLSA and how they affect staffing agencies and their clients. Use these insights to ensure your HR team and managers follow all these regulations. Avoiding fines, tax penalties, and the professional embarrassment of non-compliance is the goal.
Providing a federal minimum wage remains a core principle of the FLSA, serving as one of the reasons for the creation of the act. The wage currently stands at $7.25 per hour as of 2009. Notably, most employers offer pay rates higher than that to successfully recruit professionals in a competitive job market.
The FLSA’s overtime regulations remain one of the most critical sections of the act for staffing agencies. This is especially the case for agencies providing contingent workforce management services or with clients employing many hourly workers. Check out our previous article covering compliance with the act’s overtime standards in more detail. (NOTE: CROSSLINK to OVERTIME RULES ARTICLE)
Finally, the FLSA establishes standards for defining “hours worked” as well as requirements for recordkeeping. Simply stated, hours worked denotes the period an employee is required to be “on duty.” This might be at their employer’s workplace, a client location, or even when working remotely. Additionally, the FLSA requires businesses to retain all payroll records for at least a period of three years. Timecards and associated information are kept for at least two years.
Leveraging a Modern Time Collection Tool to Ensure FLSA Compliance
Staffing agencies focused on compliance with the standards of the FLSA benefit from using a modern time tracking application. Timerack offers a state-of-the-art solution for time collection designed specifically for staffing agencies and their clients. This approach to attendance tracking especially benefits agencies that also provide contingent workforce management solutions to other businesses.
Let’s reexamine the most critical parts of the FLSA for staffing agencies and how Timerack helps companies manage compliance. Use this information for a better understanding of how our application suite eliminates the risk of fines and tax penalties for non-compliance. These insights ultimately help you make an informed decision on leveraging our tools for your organization.
The FLSA to Timerack Feature Matrix
- Managing Overtime Rules Compliance: The FLSA’s regulations for overtime rules require staffing agencies and clients to follow rigorous guidelines for recording overtime. However, this complexity increases for agencies with multiple branches or clients located in different regions. Notably, states might have different overtime rules compared to the federal government. HR teams sometime struggle to stay compliant in this scenario.
Timerack supports the customization of overtime rules by client. This feature simplifies the process of managing overtime across different states. It helps agencies avoid the risks of non-compliance when managing a widely dispersed workforce.
- Tracking Hours Worked: The FLSA requires staffing agencies ensure all employees’ and contractors’ hours are tracked no matter their work location. This effort becomes more difficult when considering the hybrid employment models currently popular in the business world. Staffing agencies might have employees working onsite, remotely, or at various client locations.
Timerack boasts a wide array of hardware and software to seamlessly handle your time collection needs. These include modern timeclocks and kiosks for attendance and time tracking. In fact, some of these tools even support biometric access, boosting your agency’s security footprint. Our software includes web-based, desktop, and mobile app options.
- Timesheet Records Retention: As noted earlier, timesheet records must be retained for a period of two years, according to the FLSA. However, some staffing agencies might want to keep those records even longer to facilitate historical analysis and future planning. This effort ensures they have the flexibility and scalability to handle peak demand periods.
Timerack leverages secure data servers to store, encrypt, and protect timesheet data. Our software also includes in-depth analytics to gain a better understanding of agency workloads on a daily or long-term basis. It also seamlessly integrates with other applications for recruiting, ATS, and payroll management.
Does Your Staffing Agency Need Time-Tracking Solutions?
If your staffing agency needs to improve its time collection approach to manage FLSA compliance, connect with the experts at Timerack. Our best-of-breed application suite and hardware provides an effective and secure solution for your time tracking needs. Contact us at your earliest convenience to schedule a demo.
