The QuickClock is compatible with all operating systems, requires no software to install or configure and supports most all existing proximity cards. Read more about the device on our QuickClock Overview page.

The DOL has been given unprecedented instruction to seek civil penalties even in a first investigation of a worksite. According to Paul DeCamp, former administrator of the Wage and Hour Division under President George Bush, commented this was very unusual, saying penalties used to be only for second or third violations.

DeCamp said he’s also seeing a broader effort to expand claims to an enterprise-wide basis. In other words, it used to be that an investigation would be resolved to a single worksitea. Now if there is a violation at a site, the assumption is that violoations must be occurring on a companywide basis and investigations are often follow-up to all company worksites.

Targeted Industries
Industries targeted by the Wage and Hour Division include:

• Construction, specifically residential construction;
• Franchisor/franchisee;
• Corporate parent/subsidiary;
• Warehousing;
• Janitorial;
• Hospitality, specifically food/beverage and housekeeping;
• Home health care;
• Child care;
• Transportation;
• Meat/poultry processing;
• Staffing companies; and
• Gentlemens’ clubs.

Executives and Officers – Watch Out
An increasing number of class-action wage and hour complaints are naming individual officers, such as vice presidents of HR, and managers as defendants, DeCamp noted. Courts have been reluctant to dismiss claims against individuals who arguably had some role in setting or implementing the policies at issue, particularly where there is an ownership interest, he noted.

Exempt Classifications Increasingly Scrutinized
Positions receiving a higher level of scrutiny when it comes to exemption classification include accountants, engineers and IT. “There is a lot of activity with the professional exemption,” DeCamp remarked. Walmart recently felt the sting of the DOL in May 2012 when the department fined the retailer $4.8 million in back wages due to miss classification of employees.

Timekeeping Practices
DeCamp highlighted timekeeping practices that can lead to class actions, including:

• Automatic meal deductions;
• Supervisors editing employee time;
• Rounding;
• Required early arrival;
• Off-the-clock pre-shift meetings; and
• Off-the-clock shift exchange.

The automatic meal deduction is only unlawful if a meal is not taken, but often the DOL will conclude it has not, particularly in the health care industry, he noted.

In addition to complying with the FLSA and state wage and hour laws, Decamp recommended that employers tell employees that if their time records are not accurate, they should let employers know immediately.

So why is the IRS so concerned about this? Well from an employer stand point, paying others as independent contractors has it’s benefits – the biggest being that it will save the employer money, lot’s of it.

How will an employer save money using independent contractors? First off, they’ll pay less in taxes and fees because they don’t have to pay payroll taxes, Social Security, Medicare or Federal or State Unemployment Tax. On average, expect to save about 8% by using independent contractors.

Second of all, from a benefits standpoint, most benefit plans require that employers cover all employees, not independent contractors. As you can probably see, the incentive is pretty strong for employers to convert all employees to independent contractors.

But wait, before you send out that memo letting everyone know they’re now independently employed, keep the following in mind:

The IRS Wants You To Have Employees.

Why? You’ll pay more in taxes of course. About 60% of all taxes collected by the IRS come by way of employment taxes. For every independent contractor you hire means less tax revenue for the government.

From the IRS standpoint, determining who is a true independent contractor and who is really an employee involves more then simply labeling them as such. This is why they’ve recently released some tools to help define who is truly an employee and who is actually an independent contractor.

It basically comes down to three areas you must ask yourself:

• Behavioral Control
• Financial Control
• Relationship of the Party

After going through each of the questions for each area, the IRS claims that it should be pretty clear whether or not you’re really an employee. More information on each of the areas can be found below.

Behavioral Control
A worker is an employee when the business has the right to direct and control the worker. The business does not have to actually direct or control the way the work is done — as long as the employer has the right to direct and control the work.

• Receiving Instructions: If you receive extensive instructions on how work is to be done, this suggests you are an employee. Instructions can cover a wide range of topics, such as:
  • How, when, or where to do the work
  • What tools or equipment to use
  • What assitants to hire to help with the work; and
  • Where to purchase supplies and services

  If you receive less extensive instructions about what should be done, but not how it should be done, you may be an independent contractor. For instance, instructions about time and place may be less important than directions on how the work is performed.

• Training: If the business provides you with training about required procedures and methods, this indicates that the business wants the work done in a certain way.

Financial Control
These facts show whether there is a right to direct or control the business part of the work. Consider:

• Significant Investment: If you have a significant investment in your work, you may be an independent contractor. While there is no precise dollar test, the investment must have substance. However, a significant investment is not necessary to be an independent contractor.
• Expenses: If you are not reimbursed for some or all business expenses, then you may be an independent contractor, especially if your unreimbursed business expenses are high.
• Opportunity for Profit or Loss: If you can realize a profit or incur a loss, this suggests that you are in business for yourself and that you may be an independent contractor.

Relationship of Parties
These facts illustrate how the business and the worker their relationship. For example:

• Employee Benefits: If you receive benefits, such as insurance, pension, or paid leave, this is an indication that you may be an employee. If you do not receive benefits, however, you could be either an employee or an independent contractor.
• Written Contracts: A written contract may show what both you and the business intend. This may be very significant if it is difficult, if not impossible, to determine status based on other facts.

In Summary
Having independent contractors will save you money, but you MUST do it right. That means following the new IRS rules as well as having a signed Independent Contractor Agreement.

You may pay less in taxes, but you also don’t want to invite trouble by incorrectly labeling an employee as an independent contractor.

Myth #1: Paying an employee a salary or commission exempts an employer from paying overtime.

One of the most common mistakes employers make is assuming that every employee who is paid on a salary or commission basis can work unlimited hours without being paid overtime. Many employees who are paid on a salary or commission basis must also receive overtime pay when they work more than 40 hours in a 7-day workweek. In order to be exempt from overtime pay requirements, an employee who is paid on a salary or commission basis must meet specific requirements.

Myth #2: Paying a salaried employee at least $455 per week exempts a retailer from paying overtime.

The $455 per week figure is only one of several criteria that must be met in order for a salaried employee to be exempt from overtime pay requirements.

Myth #3: Giving employees titles such as Manager, Office Manager, Stockroom Manager, Executive, etc. exempts an employer from paying overtime.

An employee’s job title has no bearing on whether that employee is exempt from overtime pay requirements. While it seems as if a “Manager” should automatically fall under the Administrative Exemption category, the actual job duties – not the title – must be considered.

Myth #4: Paying all hours of work at straight time and having the employees sign something releasing the business from the obligation to pay overtime is legal.

An employee is either entitled to overtime pay under federal law, or they are exempt. If an employee is entitled to overtime pay and they sign a waiver saying they agree to work for straight time pay regardless of the number of hours they work, that agreement isn’t worth the paper it’s written on. The employer is still obligated to pay time and a half for all hours worked over 40 within a 7-day workweek.

Myth #5: Hiring minors under 16 years of age can be beneficial because young workers don’t cost as much, don’t know overtime laws, and rarely complain.

It doesn’t matter how old an employee is, the minimum wage is still $5.15 per hour. If you own a retail business, you better not be hiring anyone under the age of 14 unless it is your own child. Federal law restricts the hours that 14 and 15 year old employees can work – and restricts the types of work they can do. And yes, teenagers (and their parents) DO complain when they figure out a business is violating the law. That’s why so many businesses get whacked with penalties for child labor law violations.

Myth #6: It’s safe to assume a competitor is paying its employees correctly, and you should model your business upon theirs.

Don’t assume the guy down the street knows more than you. Just because they don’t pay overtime doesn’t mean you shouldn’t either – do your own checking.

Myth #7: If your business grosses less than $500,000 a year, your employees are automatically exempt from overtime pay.

Some or all of your employees may be entitled to overtime pay, depending on what their job entails. If an employee handles credit cards or checks, picks up mail at the Post Office, or receives goods shipped in from out of state, then that employee is engaged in “interstate commerce” and is entitled to minimum wage for all hours worked, and overtime pay (time-and-a-half) for all hours over 40 in a 7-day workweek – unless the employee falls into a specific exempt category.

Myth #8: I do not need to include hours spent by my employees traveling or training towards calculating overtime.

Guidelines for payment for travel time, training time, or other work activities. Attendance at lectures, meetings, training programs and similar activities can be unpaid time only if four criteria are met:

• It is outside normal hours,
• It is voluntary, not job related, and
• No other work is concurrently performed.
• Whether or not travel time is compensated depends on the kind of travel involved.

If, for example a worker drives from home to the store where they work, that travel isn’t work time. If an employee travels from the store to another work location for a special one day assignment, that may be considered work time. Time spent by an employee in travel as part of his/her principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.

Myth #9: Seasonal businesses are always exempt from paying overtime.

The exemption for seasonal businesses only applies to seasonal amusement or seasonal recreational establishments. It does not apply to seasonal restaurants or lodging establishments.

Myth #10: All that matters is keeping track of the total time not the hours worked by my employees.

Record keeping is important. If you employ someone – no matter if it’s temporary, permanent, full time or part time – you must keep records of hours worked, the basis on which they were paid, their regularly hourly rate, total earnings, date of payment, and how much they were paid, among other things.

Today, wage and hour class actions outnumber all other discrimination class actions combined. With the explosion in wage and hour claims over the past several years, most employers are finally starting to grasp the severity of this litigation nightmare.

“It’s been a perfect storm for wage and hour class and collective actions against employers,” says Shanti Atkins, Esq., President and CEO of ELT. “Employers are being hit from two sides. On one, there is a better funded, more fully staffed Department of Labor (DOL) that has made fighting ‘wage theft’ one of its key priorities. On the other side are aggressive plaintiff law firms that literally salivate at these easy-to-identify and easy-to-win, lucrative class actions.“

According to the DOL, more than 80% of employers are out of compliance with federal and state wage and hour laws. Vowing to fight back on non-compliance, President Obama increased the DOL’s budget back in 2010, which means even stricter enforcement of wage and hour laws and hundreds of additional field investigators. These investigators are tasked with closely examining the pay practices surrounding overtime, off-the-clock work, meal and rest breaks, and auto-deductions at hundreds of employers around the country.

Adding to the risk, wage and hour lawsuits have become a strong focus within law firms across the nation. Finding violations of antiquated wage and hour laws based on technicalities is relatively simple, and the burden of proof is on the employer who is presumed guilty until proven innocent. This type of litigation also lends itself to a “template” lawsuit where multiple employers can be simultaneously targeted.

The money on the table for wage and hour class action settlements is huge. The average federal level settlement is $23.5 million and $24.4 million at the state level. With the majority of employers already out of compliance, these are the kind of open and shut cases plaintiff’s law firms love to take on. Although these lawsuits are often presented as noble efforts towards protecting the working class, most of the money ends up in the hands of the attorneys. In most cases, class-action participants see as little as a few hundred dollars.

Employers can protect themselves from wage and hour claims by proactively training their workforce on wage and hour compliance. These employers are using training not only to help prevent wage and hour issues in the first place, but to arm their organization with powerful legal defenses in case of litigation. Wage and hour training can help to reduce damage awards by as much as 66%.

“Most plaintiff law firms won’t want to take on a wage and hour case if the employer has a robust compliance program that includes wage and hour training for employees and managers,” says Atkins. Evidence of a consistent and thorough program makes a class harder to certify, a case harder to win and plummets settlement values. “It’s like having a security system sign in your front yard during a neighborhood crime wave. It may not provide 100% protection against a robbery, but the burglar is likely to go to the less risky house down the street.“

Another measure being adopted by employers across the nation is the use of technology to help comply with the demands of the DOL. Record keeping is a huge part of compliance when it comes to time keeping and payroll related issues.

“We’ve seen DOL audits disappear almost over-night due to a quick and comprehensive response to providing time keeping related records.” says Erik Rowland, President of TimeMD.com. “Many employers panic when they receive a letter from the DOL announcing they will be arriving at their business. They don’t know what to present or how to put it together. Using a solution such as ours makes it very easy to respond.“

Some of the most critical items to have ready include payroll records and time cards/time sheets for at least the past two years. Systems like TimeMD prove absolutely critical in proving that information.

To learn more about TimeMD.com and how it can help your business with a DOL wage and hour audit, contact one of our representatives today.

The app will utilize the tablets integrated camera in order to take a photograph of the user as they record time punches. This picture will then be saved and uploaded to the TImeMD servers so that managers can at their leisure, compare the photograph with the personnel’s photo on file. This will allow managers to quickly identify those who might be abusing the time tracking process by “buddy punching”.

The process of “buddy punching” has created problems for management for years. The basic idea is that employee A receives a phone call from employee B asking if employee A will punch in for them. This typically occurs if employee A is running late and want’s to avoid disciplinary action or a deduction in wages. Employee B obliges by clocking in employee A by whatever means being used to track time.

In most cases the manager or supervisor is none-the-wiser. As a result hundreds of thousands of employees are taking advantage of this process each and every day. This results in millions of dollars of “stolen” time from employers. In order to address this problem, employers have sought technology by way of biometric verification as a possible solution.

Biometric verification, or a way of uniquely identifying an individual by some distinguishing biological trait, has been employed by companies for years as a possible solution to stop buddy punching. Some of the more common biometric devices are fingerprint readers, hand geometry, retina or iris pattern scanners.

However, most of these biometric solutions cost more then what most businesses can afford. Some even attempt to purchase cheap off-the-shelf solutions. They quickly discover these solutions are frustrating to use and suffer from a high failure rate when it comes to accurately identifying personnel. As the old saying goes, you get what you pay for. The more accurate the biometric process needs to be, the more you’ll need to spend.

TimeMD has solved these problems by taking the complexity out of traditional biometric verification processes. Gone are the days of relying on complex programming and proprietary hardware solutions. When it comes to recording a time punch, TimeMD has adopted the philosophy that verification can come at any point, as long as the managers and supervisors have the tools they need to verify the employee. That way employees are free to record their punches knowing that management can at any time, verify they are who they say they are. This is done by verifying the photograph taken at the time of the punch.

“Our web based time and labor system can work with any open time clock or biometric device, but we developed the PicTime app to fill a void in the market. We consistently hear clients complaining about the cost of existing biometric solutions so we developed PicTime.” Says Erik Rowland, President of TimeMD.com.

According to Mr. Rowland, to further expedite the identification process of personnel, an e-mail can be sent automatically to the payroll or HR manager that displays dozens of actual pictures in addition to the employees validated photograph. In a matter of seconds the manager can then easily validate that the person clocking in and out was who they were supposed to be.

TimeMD.com has been offering an innovative web based solutions for nearly a decade by giving both small and larger employers a simple intuitive interface combined with the robust features needed to accommodate the most demanding employer.

“Because our system is purely web based, managers deployed all over the country have access to critical data in real-time all in one place simply by accessing their account online. The technology has changed the landscape of how employers manage their labor cost.” says Rowland.

Clients that used to review labor cost at the end of the month. Now instead of reviewing cost, users of TimeMD can manage it. They us the system to make immediate adjustments in labor allocation based on daily market conditions.

“Since labor is by far the largest expense for the majority of companies, real-time data is critical for managing it. Now, with PicTime, even our smallest clients can get real-time, validated data on their employees.” says Rowland.

To learn more about PicTime and how it can help your business, contact a TimeMD.com representative today.

The study was completed by The Research Institute on Social and Economic Policy (known as RISEP) at Florida International University. Thiw was the second study on wage theft in Florida that uses data from the U.S. Department of Labor and several community organizations. (Read the full report below)

The RISEP considered employer “wage theft” as situations when workers are not paid their legally owed wages, and according to RISEP it includes “unpaid overtime, not being paid at least the minimum wage, working during meal breaks, misclassification of employees as independent contractors, forcing employees to work off the clock, altering time cards or pay stubs, illegally deducting money from employees’ pay checks, and paying employees late.”

Key findings from the study include:

• From September 2008 to January 2011 more than $28 million in unpaid wages has been recovered through the U.S. Department of Labor’s Wage and Hour Division, Miami-Dade’s anti-wage theft ordinance and community groups.
• Florida’s key industries — tourism, retail trade and construction — have the highest numbers of reported wage violations.
• An average of 3,036 wage violations per year are reported to the Wage and Hour Division in Florida.
• Despite ample evidence of widespread wage theft among low-income workers, as of December 2011, Florida’s attorneys general have not brought one single civil action to enforce the state’s minimum wage law, enacted in 2004.
• Since the full implementation of the Miami-Dade County anti-wage theft ordinance in September 2010, the county’s Small Business Development agency has recovered nearly $400,000 in unpaid wages for 313 workers who unlawfully had their wages withheld from them.
• The Department of Labor recovered just under $16 million in wages for more than 24,000 workers in Miami-Dade, Hillsborough, Broward, Pinellas, Palm Beach and Orange counties.

“We estimate that out of $28 million recovered, it’s two to three times that amount of unreported cases, because how many people really know about the wage theft ordinance in Miami-Dade, or about the Wage and Hour Division?” stated Cynthia Hernandez, one of the report authors.

“In the case of Tampa there’s a community group there that didn’t know about the Wage and Hour Division,” Hernandez says, “so you can imagine most people don’t know, or are afraid to go, or don’t follow up or oftentimes the Department of Labor can’t help them because they’re not covered by the Department of Labor jurisdiction.”

The report states what supporters of the local anti-wage theft ordinances have told news agencies before: Existing federal workplace laws do not protect millions of workers, including “hospital, school, or government workers or workers at small, local firms, including contractors for larger companies.” Florida’s minimum wage law also excludes millions of workers “from protections against employers who withhold their earnings.”

In the last six months, various agencies have reported on at least two cases of wage theft in the construction industry: in Fort Lauderdale and Miami-Dade. In both cases, workers were sent time and again from the general contractor to a sub-contractor, who had sub-contracted to a third company. In the Miami-Dade case workers were paid, but some have taken their case to the county’s Small Business Development office, which administers the local wage theft program.

The RISEP study indicates that in Florida there are six Wage and Hour Division investigators, one for every 1.2 million workers. The lack of Wage and Hour Division resources and jurisdiction has created a backlog of cases in the state, according to the report.

The study also states that, as of the year 2000, “Florida has no state equivalent to a Department of Labor to investigate wage and hour complaints and does not have staff to enforce its minimum wage law (currently set at the rate of $7.67 per hour).”

More than 9,100 cases of wage theft were reported to Florida’s Wage and Hour Division from September 2008 through January 2011. About 5,000 of those cases occurred in five industries: accommodation and food services, retail trade, construction, health care and social assistances, and administrative support and waste management and remediation services.

The business lobby that supports the current GOP bill that would stop local communities from enacting ordinances like Miami-Dade’s includes the Florida Retail Federation, which has a pending court challenge against Miami-Dade’s wage theft crackdown. Associated Builders and Contractors also supported the bill during the 2011 legislative session.

Samantha Hunter Padgett, deputy general counsel for the Florida Retail Federation, stated in December that her organization supports the Legislature’s bill because “existing state and federal laws address the issues raised in local wage theft ordinances.”

Hernandez calls her group’s report “timely.”

“Hopefully enough legislators see it and consider [wage theft] an issue,” she says. “And while their argument going around is that ‘We don’t want a patchwork of county ordinances,’ they’re not proposing any statewide mechanisms.”

“The current mechanisms are not sufficient, but they could at least help, and they’re not being funded,” Hernandez says.”For example the attorney general’s office has never pursued a wage theft case.”

“Because of studies like this is why we are so excited about our product.” says TimeMD.com owner Erik Rowland. “In most cases, business owners want to comply with state and federal guidelines when it comes to wage and hour issues, however they don’t know where to start or they feel it’s too complicated. Our product simplifies the entire process.”

For more information on how systems like TimeMD.com can help, please contact a representative today.

But what should you expect when the DOL comes calling for an investigation (either as part of a random audit or a complaint)? First thing you should know is that they typically don’t call asking when a good time might be. Instead, you’ll get a letter announcing that they will be coming to your office at a specified date and time and that they want to review some records.

The U.S. Department of Labor has released a Fact Sheet for Employers about visits to employers that the department may conduct. It’s a great starting point for any questions you might have as an employer.

But beyond that, the department may ask to review specific documents including:

• Payroll records (including payroll journals, time cards, and/or time sheets) for the last two years;
• Lists of all employees considered exempt from minimum wage or overtime rules (and the exemption claimed) and the job descriptions for those “exempt” employees;
• Lists of employees who hold more than one position within your company;
• List of your three major vendors or supplies;
• Records or documents that reflect your gross revenue of your business for last three years (typically, the first page of Rom 1120 of the U.S. Corporation Income Tax Return);
• Federal Tax ID number (“EIN”);
• Names, addresses and phone numbers of all employees (present and former) for you for the last two years;
• Dates of birth, dates of employment and job titles for all those persons under the age of 18 who have worked for you for the last two years.

Now, you might ask, what gives the government the right to ask for this? Can they really just show up at my business and demand for this information? Section 11(a) of the Fair Labor Standards Act spells it out:

“The Administrator or his designated representatives may investigate and gather data regarding the wages, hours, and other conditions and practices of employment in any industry subject to this chapter, and may enter and inspect such places and such records (and make such transcriptions thereof), question such employees, and investigate such facts, conditions, practices, or matters as he may deem necessary or appropriate to determine whether any person has violated any provision of this chapter, or which may aid in the enforcement of the provisions of this chapter.“

These types of investigations often given employers very little time to prepare but understand that what is said during those meetings can and will be held against you. So consider consulting with an attorney early in the process who can coordinate the investigation and serve as a conduit between the DOL and you.

And if you don’t already track the information above – especially time cards or time sheets, be sure to take steps in this new year to do so. Under DOL regulations, these types of records shall be made available “within 72 hours” notice. That won’t give you much time especially if you don’t have this information stored digitally. This is why so many of our clients find TimeMD invaluable. During audits such as these, all your time records are available at the click of a button. Contact a TimeMD representative today to learn more.

Here’s how to do it:

• Open Safari on your iPhone or iPad.
• Navigate to the login screen on TimeMD.
• Press the square with arrow icon at bottom of screen.
• Select ‘Add to Home Screen’.

When the shortcut has been added to your iPhone’s home screen, you can move it around as you can with app shortcuts.

Just press and hold the TimeMD icon and drag it to where you want it to appear. Tap the home key to set it in position.

Here is a screenshot showing where this feature can be activated within the preferences area within TimeMD:

Once activated, the system will automatically track the GPS coordinates during the clock in and clock out process from the Web Clock. Managers can then view exactly where the punch occurred. This is done from the “TimeTracker -> View All Entries” page. Here is a screenshot showing where the link can be found:

When the above link is clicked, the user is taken to a Google map showing the specific location of the punch. Again, here is a screenshot showing more:

Again, we are very excited to extend this new feature to all our clients. As far as cost is concerned, in an effort to remain as competitive as possible, there is no cost to use or activate this new feature for our enterprise users.

Please let us know if you have any questions about this new feature. Keep an eye out, we’ve got a number of new enhancements that we’ll be rolling out in the near future.