Page with FLSA fair labor standards act on a table.

The Importance of FLSA Compliance in the Public Sector


by Donald Pagel, CEO – Pagel Consulting Group, LLC

“If you always do what you’ve always done, you’ll always get what you’ve always got.”
― Henry Ford

Henry Ford changed the world when he created an entirely new process to manufacture cars. The assembly line created new efficiencies in all areas of manufacturing and ushered in one of the most dramatic economic booms in human history. The fear of the workers was that this increase in efficiency would reduce the need for labor. What actually happened was that efficiency made the dream of car ownership within the grasp of the common man and the increase of purchasing power also increased labor demand.

Change is most difficult before the benefits of change are realized.

Implementations of workforce management technologies can often be feared because of the change it creates in the everyday life of both the employee and the manager. The employee often fears that the requirements of “punching a clock” can restrict their freedom until they experience the value of visibility and the importance of fairness of adhering to the Fair Labor Standards Act (FLSA). Managers fear being treated like a “timekeeper” until they realize the benefits of becoming true resource managers and the ease visibility gives them into controlling budgets and employee favoritism.

Fear of change can be overcome by increasing the across-the-board fairness that both a workforce management system can offer coupled with unifying policies to ensure both fairness as well as compliance with the Fair Labor Standards Act.

When implementing any new system, the temptation is to force the system to do “what you have always done”, thus eliminating the potential gains it can offer.

Public Sector Challenges with the FLSA

The Fair Labor Standards Act was signed by President Roosevelt in 1938 in response to ongoing employee abuses of the Great Depression. For decades after the passing of this important legislation, state and local governments were considered exempt from it. A number of important legal cases from the 1960’s through the 1980’s were brought before the US Supreme Court. Finally in 1985, Garcia vs. San Antonio Metropolitan Transit Authority [1] settled the issue when the court made adjustments in FLSA for compensatory time and the unique needs of peace officers. These changes finally held most government agencies accountable to the amended act.

Many government agencies today still struggle with being compliant with the FLSA. The concept of “Exception Pay” or “Pay from Schedule” is still the common practice. Because of this, the Department of Labor (DOL) has stepped up audits of government agencies due to increased complaints from employees and unions alike. The DOL has also created a tool for state and local government agencies to do a “self assessment”.

Implementing a workforce management system is a perfect opportunity for state and local governments to re-evaluate their policies and procedures to unify policy and ensure compliance with the FLSA. Missing this opportunity will only lead to increased struggles later to enact policies that protect both the employees and the employer. Using a best practice procedure of “Positive Pay” for all non-exempt employees ensures full compliance with the FLSA through accurate documentation of hours worked. This must also be backed up by policy in order to not only ensure fairness but also reduce challenges to civil service courts and union leadership.

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