Four Common Compliance Issues Every Employer Can Prepare For with My Help

Most business owners want to do the right thing — but staying compliant isn’t always as straightforward as it should be. Employment rules can change, situations can get gray, and what worked last year may quietly put you at risk today. From Family Medical Leave and overtime to meal breaks, PTO tracking, and employee classification, compliance shows up in the everyday details of running a business. This blog breaks down the most common compliance issues we see and explains why clear policies, accurate timekeeping, and the right systems matter more than ever.

Stacy Cooper, CEO, SHRM-CP

#1 Family Medical Leave, Paid Sick Leave, and PTO

Employees take time away from work for many reasons. They may be caring for a family member, recovering from an illness, scheduling a procedure, or simply using earned time off. Several laws govern how employers manage that time, and each area brings its own set of obligations.

Family and Medical Leave

The Family and Medical Leave Act gives eligible employees up to 12 weeks of unpaid, job protected leave for qualified family or medical reasons while continuing access to employer sponsored health insurance. The biggest challenge for employers is accurate tracking. Without clean records, it becomes difficult to confirm eligibility or show compliance if questions arise. Automating leave tracking ensures you record every day taken and maintain clear documentation.

Paid Sick Leave

There is no federal requirement for paid sick leave. Some temporary emergency rules from the past have expired, which means the responsibility falls to states and local jurisdictions. Many regions now require employers to provide paid sick time, and the details vary by location. Rates of accrual, usage caps, carryover, and qualifying reasons can all differ. Because of this wide variation, employers benefit from a system that can adapt to multiple rule sets without relying on manual updates.

Paid Time Off

Paid time off is a standard benefit, but the rules governing it are anything but uniform. Most companies award PTO based on hours worked or years of service. Tracking those hours by hand becomes complicated fast, especially when employees accrue time at different rates. Manual calculations also increase the risk of errors that affect payroll, morale, and compliance.

While there is no federal law requiring PTO, many states regulate how unused vacation time is treated at separation. Others restrict or prohibit use it or lose it policies. Some cities also impose rules around paid leave. It is important to check with your state and local labor departments to confirm what applies to your workplace. Automated systems help ensure balances are accurate and that payouts reflect the rules in your area.

#2 Tracking Meals and Breaks

While federal law does not require breaks, many states do. These rules can apply to rest periods, meal periods, or both. Requirements vary by number of hours worked and sometimes by job type or industry. Unfortunately, thousands of employers violate break laws each year, often without realizing it.

You can protect your business with tools that support consistent compliance, including:

• Time clock prompts for unpaid meal breaks

• Manager alerts for missed break punches

• Real time oversight for mobile employees

• Automated recordkeeping of all shift activities

• A payroll review process that catches errors early

These safeguards help you avoid accidental violations and maintain clean records for any review or audit.

#3 Managing Overtime

Overtime issues remain one of the most common wage and hour challenges. When mistakes happen, they often lead to chain reactions that affect minimum wage compliance, payroll accuracy, and employee trust.

Working Off the Clock Is Illegal

Non exempt employees must be paid for all hours worked. Asking or allowing someone to work before clocking in, after clocking out, or during unpaid breaks puts your company at risk. Investigations often reveal missed time that adds up quickly. Automated time and attendance tools help ensure every hour worked is captured and that breaks and overtime are recorded correctly.

You can reduce risk by using:

• Biometric time clocks that verify identity

• Configurable pay rates for different types of work

• Tip tracking tools

• Meal and break prompts that require accurate punch activity

When Overtime Is Required

Employers must pay overtime when a non exempt employee works more than 40 hours in a defined workweek. The overtime rate must be at least one and one half the employee’s regular rate of pay. There is no federal limit on hours for employees age 16 and older. Overtime is not required for weekends or holidays unless the employee exceeds the weekly threshold. Some states, unions, and industries have additional overtime rules.

To stay compliant, employers should:

1. Confirm that exempt employees meet the duties and pay requirements

2. Ensure independent contractors meet IRS criteria

3. Understand how piece rate work and tipped work affect pay

4. Prevent any form of off the clock work

5. Pay correctly for call in or on call time

6. Follow all state and local rules around breaks and meals

7. Pay for training hours, uniform changes, and travel between job sites

Automated timekeeping tools support these steps with features such as:

• Alerts when employees approach overtime limits

• Early punch lockouts for meals and breaks

• Overtime calculation based on job code

• Tip reporting

• Flexible scripting for complex local rules

• Audit ready reporting

• Mobile location controls with geofencing

#4 Employee Classification

Proper classification affects everything from overtime pay to eligibility for benefits. Errors can lead to penalties and costly back pay.

Exempt employees do not receive overtime if they meet both the duties and salary tests outlined by federal rules. Titles alone are not enough. Employees must perform the work defined for that exemption category.

Non exempt employees do not meet those tests, and they must receive overtime for hours over 40 in a workweek.

Classification decisions also influence minimum wage protections and workers compensation eligibility. To stay compliant, employers should:

1. Follow all federal and state classification rules

2. Track time for all employees, regardless of classification

3. Maintain accurate time and payroll records

Automated systems make these steps easier. Employees clock in with a device or mobile app. The system stores records automatically, creating detailed virtual timecards that support strong compliance.

Automated Time and Attendance for Compliance Confidence

A modern time and attendance system gives you a reliable way to stay ahead of wage and hour rules. It reduces errors, provides clean records, and supports your team with tools that simplify daily operations.

If you are ready to strengthen your compliance strategy and protect your company, I am here to help.

Stacy Cooper, CEO, SHRM-CP

251-273-4754

stacy@lnjemployerservices.com

Putting the Human in Human Resources!

~ Stacy Cooper