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You’d think employees would be eager enough for their paychecks that they would make sure to turn in time or reports submitted promptly. Unfortunately, that’s not always the case, and employers may be tempted to withhold pay as a not-so-gentle reminder for workers to submit on time. That’s temptation best avoided as it could spell trouble for your business and you personally.
Recently, an employer asked whether it’s legal to establish a policy stating that if employees didn’t submit their time or notes from a specific job at a specified time they won’t get paid. As tempting as that policy sounds to employers burdened by tardy materials (even time), is not allowed under the federal Fair Labor Standards Act (FLSA).
Under the FLSA, it’s the employer’s obligation to keep records of the hours worked by employees. An employer will typically request that employees complete time sheets or time cards and rely on its workers to provide information about their hours worked, but the ultimate responsibility for such record keeping falls on the employer.
Also, under FLSA, it’s the employer’s obligation to keep any records on a client or patient that an employee preformed. An employer will typically request the employee to complete these records , but again that record keeping falls on the employer.
So what recourse does an employer have if an employee doesn’t submit information needed to issue a paycheck? Contact the employee to try to establish the number of hours worked during the pay period. Also, an employer can check with the employee’s client, supervisor or coworkers to determine the hours worked.
The employer should pay the errant employee the amount it believes in good faith covers the time actually worked. Any disputes can be addressed later.
If the employee fails to submit records required for billing purposes or for record keeping, they can attempt to collect that information but they can not withhold any money from a pay check (even if they have written permission from a signed policy you require an employee to sign).
FLSA prohibits withholding pay to employees who fail to turn in time sheets or required reports but says employers are within their rights when they adopt policies requiring workers to turn in hours worked at a specified time. Employees violating that policy can be disciplined even though they must be paid for all time worked.
The law prohibits withholding or diverting wages unless:
We recommend you start by informing all employees that turning in time cards or reports at a specified time is company policy and that they may be disciplined for failing to do so. Then, follow through on your policy.
You can write up employees for initial offenses and taking stronger action for repeat offenses, possibly suspensions and termination if the problem becomes sufficiently serious.
When an employee doesn’t turn in hours worked, one option an employer has is to pay based on available information, such as the employee’s work schedule.
When an employee doesn’t turn in reports, you have to pay them regardless.
Employers can check time other ways, too. It can create bookkeeping issues when employees don’t turn in time cards and you have no idea what the actual payroll amount should be. In that situation, evaluate the employee’s average hours worked and pay her the amount that covers those hours. If the employee actually worked more or fewer hours, you will have to address the discrepancy in a future paycheck.
Adopt a clear policy stating time card and reporting procedures and deadlines. Make sure you’ve informed employees about your policy. Then, if an employee fails to complete or turn in a time card on time, you may discipline him for violating company policy. That discipline may not be delaying or denying his pay, however.
When termination isn’t an option, it can be very difficult to have employees follow simple rules. When that happens you have some options. In some situations, terminating a more challenging employee as an example can work. Other times rewarding employees for getting things done on time – such as each week have a drawing for a $50 gift card to Wal-mart for those that submit on time and make a big deal about those that win the drawing. Understanding that paying people to do their job isn’t always the most optimal situation, in tight labor markets we need to be creative.