Fair Labor Standards Act Compliance: Time & Labor Tracking Then & Now

Posted by Virginia H. on Jun 24, 2014 7:00:00 AM

Painting by George Reid depicts women working in a factoryFederal Labor Standards Act compliance has been a concern of employers since the Act was passed in 1938. But labor rules compliance didn't begin with FLSA compliance. The history of employee time tracking predates the Revolutionary War.

English Roots

Trade unions are a part of early American history. Settlers brought the tradition of unions with them when they immigrated from England to the colonies. Unions focused on a range of workers' rights that included minimum pay rates and maximum work hours. By the early 20th Century, 6 to 7 percent of US workers were union members.

Tracking employee time during this era was essential for several reasons. The company wanted to make sure it got its money's worth before it paid a worker, and the worker wanted to be fairly paid his wages. In addition to complying with labor contracts, employers sought to avoid costly, violent strikes by complying with union work rules.

After the Civil War, the 10-hour day that was prevalent in many eastern towns was considered too long for a man to work. The long hours that made sense in the agricultural economy were unacceptable to skilled industrial workers. By 1886, the newly formed American Federation of Labor had made the 8-hour day one of its goals for the US work force.

Government support

The federal government adopted a pro-union stance in the wake of World War I. The War Labor Board and the War Policies Board established employee representation on "work councils" to give workers a voice as they struggled to meet the demand for war-related goods and services. These pro-labor organizations developed into the the boards and committees that would eventually administer the National Labor Relations Act.

Henry Ford 1919Henry Ford, founder of the Ford Motor Company, made the 8-hour workday the norm in the 1910s. The 8-hour shift was ideally suited to Ford's assembly line manufacturing systems. Ford paid workers $5 a day, half in wages and half in deferred profit sharing. In times of cyclical unemployment, the 8-hour day provided employers with a way to spread scarce work out among industrial workers.

Birth of the Fair Labor Standards Act

State laws tracking time for women and children were passed in the early 1900s, with employers monitoring compliance with the laws to avoid regulatory action. In 1936, Congress passed the Davis Bacon law, setting an 8-hour workday, 40-hour workweek and time-and-a-half pay for overtime for federal contractors.

Against this historical backdrop, the Fair Labor Standards Act was born. President Franklin D. Roosevelt predicted when he signed the FLSA in 1938 that it would become as important to the national work force as the Social Security Act. However, the FLSA stirred up controversy among unions and employers alike, and it was slow to gain traction, taking three Congressional sessions to pass. The Act initially established a 44-hour work week with a minimum wage of 25 cents an hour. It currently requires premium pay of 1.5 times a worker's hourly wage if the worker clocks more than 40 hours during the workweek.

Time tracking in the modern workplace

Twentieth century employers tracked employees' hours with handwritten time cards and mechanical time clocks. Timekeeping systems created recordkeeping issues for many companies, who were required to retain copies of time records to demonstrate compliance with overtime rules.

Timekeeping automation advanced even further with the advent of computer networks. Employers could verify time and attendance by examining a worker's log-in records and online activities. Computer records gave employees who made up time they missed during the week by working on the weekend a reliable way to prove they had worked the makeup hours.

The future of the 40-hour workweek

For hourly workers, the 40-hour workweek remains the norm. However, for exempt workers in a global economy, the workweek may actually be much longer.

Technology makes it easier than ever for employees to communicate with colleagues, suppliers and customers around the world. A typical exempt worker's day can begin at 7:00 a.m. with a conference call to European coworkers whose day is winding to a close. It can end at 7:00 p.m. with a call to Chinese workers whose day is just beginning.

With smartphones and tablets, an employee can be on call 24 hours a day, 7 days a week without receiving any extra pay. Employee time tracking is more important than ever to ensure that non-exempt workers receive the appropriate overtime pay.

Whether employees work 40 hours per week or more, as long as US wage and hour restrictions remain in place, employers must document their workers' hours and be prepared to demonstrate compliance with the law.

Photo Credits:
George Andrew Reid - Women Operators; Literary Digest Interview 1928

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Topics: payroll, payroll time tracking

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