Purciarele Group case Study: From Confusion to Clarity: Strengthening HR Practices in Tech

 

• Industry: Technology (Software Development)
• Location: Global
• Size: 14 employees
• Established: 12 years

Client’s Challenge

• Lack of Fair Labor Standards Act (FLSA) compliance policies, particularly concerning overtime, exempt/non-exempt status, and record-keeping.
• Needed assistance with terminating a remote employee based out of state, ensuring legal compliance with relevant labor laws and minimizing risk of litigation.

Solution / Our Approach

Information Gathering:

• Initial Consultation: We conducted a thorough consultation to understand the company’s unique needs related to FLSA compliance and the specific situation surrounding the remote employee termination. This involved reviewing existing policies (if any) and identifying gaps in wage and hour compliance as well as employee relations procedures.
• Assessment of Current Practices: Focused on the company’s current employee classifications, wage calculations, and timekeeping systems to ensure they aligned with federal and state-specific FLSA regulations.

Customized Solution:

FLSA Compliance:

1. Policy Development:
   • Developed detailed FLSA-compliant policies, clearly distinguishing between exempt and non-exempt employees.
   • Implemented guidelines for overtime pay, record-keeping, and remote worker wage tracking.
   • Established consistent rules for managing working hours, breaks, and remote employee timekeeping.
2. Employee Classification:
   • Reviewed all employee roles to ensure proper classification under the FLSA. Corrected misclassifications that could have resulted in wage violations.
   • Provided clear job descriptions with wage requirements and non-exempt responsibilities where appropriate.
3. Payroll System Alignment:
   • Worked with the Client to align their payroll system with the FLSA policies. We integrated automated time tracking software to ensure accurate record-keeping for remote and on-site employees.
   • Recommended periodic audits of timecards to maintain ongoing compliance.
4. Efficiency Gains:
   • By streamlining the payroll and timekeeping process, we saved the Client 10 hours of work each month, improving overall efficiency and allowing admin staff to focus on strategic tasks.

Termination of Out-of-State Employee:

1. Legal Compliance Review:
   • We began by reviewing the specific labor laws of the employee’s state, which had more stringent termination policies than the company's home state. Ensured the termination adhered to both federal and state laws, minimizing potential risks.
2. Termination Process:
   • Provided guidance on handling the termination respectfully and legally. This included outlining severance pay, final paycheck delivery timelines, and unused vacation payouts as required by state law.
   • Drafted a termination letter, including the reasons for dismissal and next steps, such as returning company property and finalizing any contractual obligations.
3. Risk Mitigation:
   • To reduce the risk of wrongful termination claims, we helped the Client gather all necessary documentation of the employee’s performance issues and warnings.
   • Assisted in holding a remote termination meeting, ensuring that it was conducted professionally and with HR oversight.

Key Results:

1. FLSA Compliance Achieved:
   • The Client now has fully compliant FLSA policies in place, mitigating the risk of wage-and-hour claims and ensuring proper employee classifications.
   • Remote employee work hours are tracked accurately, allowing the company to manage overtime and prevent underpayment issues.
2. Successful Termination:
   • The remote employee’s termination was executed smoothly and in full compliance with the state’s labor laws. No legal challenges or disputes arose following the termination.
   • The Client received positive feedback on how they handled the sensitive situation, maintaining their reputation as a fair employer.
3. Operational Improvements:
   • Payroll processing became more efficient, reducing errors in wage payments and making the management of out-of-state workers more straightforward.
   • The updated FLSA processes saved the employer 10 hours of administrative work monthly, improving productivity and freeing up time for other functions.
   • The Client now has clear guidelines for handling remote employees and understands the complexities of multi-state labor laws.

Strategic Wins for the Client:

1. Improved Compliance: By implementing clear FLSA policies and procedures, the Client is now protected from future wage and hour violations, ensuring that they comply with both federal and state labor laws for their global workforce.
2. Reduced Legal Exposure: The careful handling of the out-of-state employee termination minimized the risk of litigation, preserving the company’s resources and protecting its brand reputation.
3. Increased Efficiency: The updated FLSA processes and automated payroll systems resulted in a 10-hour monthly reduction in administrative work, allowing the admin to operate more efficiently.
4. Stronger Remote Workforce Management: The Client now has better infrastructure to manage a remote workforce, including time-tracking and FLSA-compliant practices for managing pay and overtime.
5. Scalable HR Practices: The Client is positioned to handle future workforce expansion, including the potential addition of remote employees in new states, without fear of legal or operational missteps.

Metrics:

• FLSA Compliance: 100% of employees are now correctly classified under the FLSA, and all timekeeping and payroll systems are aligned with legal requirements.
• Termination Outcome: The out-of-state termination was completed with no legal action or claims, and the exit process was completed within 10 days.
• Efficiency Gains: Payroll errors decreased by 30%, and the time spent managing remote employee hours was reduced by 25%. Additionally, 10 hours of admin time were saved each month due to improved payroll and timekeeping processes.

In summary, our tailored approach to FLSA compliance and the successful handling of a sensitive termination allowed the Client to minimize legal risks while strengthening their overall HR and payroll practices—leading to significant time savings and increased efficiency.