Maintaining Employee Records and Retention Strategy

Posted by bop-admin on Apr 25, 2016 9:25:31 PM

Poor Recordkeeping leads to $5.8 MM Class-Action Award

Both federal (Fair Labor Standards Act) and State Labor Code rules require employers to keep accurate time and payroll records for their employees as well as provide certain data on wage statements (See previous article: Audit California Pay Stub Information to Avoid Lawsuits.) There are penalties for failing to keep these records, and incomplete employee time and payroll data can expose an employer to wage and hour claims with costly legal ramifications.

For example, the United States Supreme Court recently upheld a $5.8 MM class action verdict against Tyson Foods for unpaid overtime.  In the lawsuit, more than 3,300 workers at a pork processing plant in Iowa filed a wage and hour claim for unpaid “off-the-clock” time.  They claimed they were not paid and should’ve been paid for their time spent changing into the required protective gear, washing up and walking to and from their workstations. This time spent before and after each shift was significant enough  that it lengthened their shifts daily and weekly, thus entitling them to overtime pay.

No Records Allow Claimants to Fill in Time Keeping Gaps

Unfortunately, Tyson did not record or document the time taken for these activities for each employee, as Tyson assumed it was not considered paid time.   Consequently, the court allowed the employees to have an expert use statistical average calculation to estimate this extra time.  The average was applied to each employee in the class, even-though the actual time required by each employee for “donning and doffing” time could vary dramatically between individual employees.

Without the required data on time sheets or payroll records, the court dismissed Tyson’s argument that it was improper to rely on the sampling methods.   Applying the same average minutes to each employee timesheet probably lead to inappropriate overtime credit for certain employees, but Tyson did not have actual proof to combat the employees’ claims.

Avoid Penalties and Lawsuits

Tyson’s failure to document this time worked opened the door for alternative methods to calculate time related to this specific lawsuit.  But a number of more routine penalties can apply when an employer fails to keep employee records or provide employees with adequate payroll information.

We described the potential penalties associated with incorrect pay data in an article last month, but another example is that the Labor Commissioner can issue citations for failure to keep the employee records for the required period of time. Employers can be subject to civil penalties of $250 per employee per violation for the first violation and $1,000 per employee for each subsequent violation.  Additionally, when an employee is not paid during the pay period in which he or she  worked that time, waiting time penalties can also be applied to the client.

Unified HCM Solutions Improve Record Keeping

OnePoint clients have an advantage because the system acts as the single, HR infrastructure to collect and store employee records in the single database.  The system is flexible to add other specific industry forms, certifications, and company specific forms that need to be retained on the single employee record.  With a single login, OnePoint provides a framework to collect and audit employee records and retain them for the required period.

OnePoint Integration with Google Drive: Seamless & Secure Record Retention

The Tyson decision demonstrates how a lack of records leaves employers with the inability to defend themselves against wage and hour claims. For this reason, more and more employers are looking for HCM solutions like OnePoint that collect and store required records in one place.

OnePoint provides an instant HR infrastructure, based on a single employee record, to capture all employment, payroll, time, wage and benefits information in a single database.  Security settings and user access settings ensure data is being accessed by authorized personnel.  Record retention periods are programmed and preserved along with cloud backup.

We are very excited to announce OnePoint is now integrated with Google for Work Apps, including seamless connection to Google Drive.  Millions of businesses across the country utilize Google’s secure cloud storage for file storage and record retention.  Now OnePoint HCM and Google provide a seamless way for organizations back-up routine recordkeeping, like payroll reports and personnel forms, directly to their Google file directory for easy and secure record retention using the security settings and permission access already established.

Topics: HR Alert, Wage and Hour, Compliance