Final answer:
Employers must track hours and calculate overtime for nonexempt employees; however, exempt employees are not subject to overtime. The Fair Labor Standards Act establishes guidelines for minimum wage, child labor, and overtime for nonexempt workers. Payroll taxes require accurate hourly tracking for proper reporting and compliance.
Step-by-step explanation:
The statement that employers must closely track the hours of exempt and nonexempt employees, and accurately calculate and pay overtime is partly true and partly false. For non-exempt employees, employers are required by law to accurately track hours and calculate overtime pay. Nonexempt employees are typically those paid hourly and who are entitled to overtime pay under the Fair Labor Standards Act (FLSA), which mandates that nonexempt workers who work more than 40 hours a week be paid at least time and a half for overtime. Exempt employees, on the other hand, are not subject to overtime pay requirements. These employees are generally paid a salary for a job that meets specific criteria regarding duties and salary level, as outlined by the FLSA.
In historical context, work in factories was strict with timekeeping and penalties for tardiness. This evolved into the contemporary practices under the FLSA establishing minimum wage, child labor limits, and overtime pay rules. Employers are responsible for maintaining accurate work records for all employees, but the tracking requirements and entitlements for overtime differ significantly between exempt and nonexempt statuses.
Regarding payroll taxes, employers must adhere to various reporting duties, typically on a quarterly or annual basis, and electronic reporting is often required. This administrative task further emphasizes the importance of accurate time tracking for nonexempt employees to determine correct tax calculations and compliance with regulatory requirements.
Finally, the claim that a higher wage will encourage significantly more hours worked cannot be universally applied. Several factors can influence an individual's willingness to work more hours, including but not limited to personal preferences, family commitments, the law of diminishing returns, and the specifics of their employment contract.