Compliance is one of the most stressful parts of being a retailer. Staying on top of it all is a headache with constantly changing labor laws, overtime rules, and scheduling regulations.

Worse, just one misstep can cost your company time, money, and efficiency.

That's where Shiftlab comes in. Our retail compliance software does all the hard work for you, providing a much-needed relief from the stress of compliance management.

Today, we’ll share exactly how Shiftlab helps you solve your retail compliance challenges.

Common Retail Compliance Challenges

Between overtime rules, break penalties, and manual tracking issues, there’s a lot to worry about when it comes to retail compliance.

Let’s take a closer look at each significant challenge retailers face.

Failing to Follow Overtime Rules

Under the United States' Fair Labor Standards Act (FLSA), most employees must be paid 1.5 times the regular pay if they work more than 40 hours a week.

Some states, like California and Alaska, have even stricter rules—like overtime pay based on daily rather than weekly hours.

But there are exceptions to these laws. For instance, employees in executive, administrative, or professional (EAP) roles are exempt if they meet specific salary and job duty criteria.

The rules and laws can be complex to keep up with, which makes them all too easy to break accidentally.

Worse, changes can easily get presented and then pulled back, which we saw happen in 2024 with the EAP salary limit changes.

Common mistakes include:

• Misclassifying employees as exempt or non-exempt from overtime
• Failing to count all the hours employees work, including training, rest breaks, and time spent travelling for work
• Miscalculating overtime pay for tipped, salaried, or commission-based employee
• Not including bonuses, shift differentials, or incentive pay when calculating overtime
• Failing to understand the (very) complex exemptions and intricacies of state, regional, and local overtime laws

To avoid penalties, retailers must keep track of classifications, ensure hours are logged correctly, and know the latest wage laws.

Non-compliance can lead to fines, back wages, and even lawsuits, which can significantly impact your business's financial health and reputation.

Unplanned Overtime

Unplanned overtime is a considerable risk for retail employers in two key ways.

First, it's a significant financial issue: unplanned overtime means you must pay out wages you didn't factor into your budget.

Second, it's a significant compliance issue: failing to track and compensate overtime can lead to wage violations, lawsuits, and fines.

Despite these apparent drawbacks, the majority of overtime is unplanned. It usually stems from last-minute coverage needs, poor scheduling practices, and workload surges.

Source: Shiftlab

The Reality of Overtime

3-6% of total hours worked accounts for OT

32% of OT is unplanned

4.3 Hours average unplanned OT / employee 

41% of all employees work greater than their scheduled shift time

75% more likely for unscheduled OT streaks to occur

Break Penalties

Break penalties are another big compliance issue, especially in states that mandate breaks and rests. In California, for example, employees must:

• Get an unpaid 30-minute meal break if they're working more than 5 hours, plus a second one if they're working over 10 hours
• Take a paid, 10-minute rest break for every 4 hours they work

If employers fail to give these breaks, the penalty is one extra hour of pay per violation per day.

Manual Tracking Issues

Relying on manual tracking systems, like paper timesheets (please don't do this!) or outdated Excel spreadsheets (this isn't the solution) creates major compliance risks for retailers.

These systems come with several significant problems:

• Human error: Managers might forget to document breaks or miscalculate employee hours.
• Break compliance failures: Without real-time tracking, it's too easy for employees to miss required meal and rest breaks. Hello, penalties!
• Overtime mismanagements: Manual systems don't offer alerts to tell managers when employees are at risk of going into overtime.
• No audit trail: If wage disputes arise, manual records can be tough to verify and put employers at risk of lawsuits and fines.

How Shiftlab Makes Compliance Effortless

If you're a retail manager, you've probably experienced situations like the ones above.

You're not alone. There's only so much that humans can do on their own while managing busy stores to stay compliant with complicated labor laws. Especially if they’re dependent on limited tools like spreadsheets and manual tracking.

This is where retail compliance software like Shiftlab comes in.

With Shiftlab, you get real-time shift assignments and scheduling tools that ensure your business is fully compliant.

Automated Compliance Checks

Shiftlab’s employee scheduling system automates overtime tracking, break scheduling, and rest period enforcement. Managers get real-time alerts before issues crop up.

That way, they can make adjustments right away and avoid expensive penalties.

Documentation and Transparency

With Shiftlab, all employee hours and compliance-related activities (like breaks) are automatically recorded, with the ability to pull FLSA reports as needed.

This creates a clear audit trail. Leadership can use the data to generate reports for audits, payroll verification, and legal compliance.

Employee Empowerment

With Shiftlab, your employees can actively participate in your compliance efforts. Our retail compliance software sends staff automated break reminders, return time alerts, and overtime warnings, empowering them to stay compliant.

Employees have mobile access to schedules, which means complete transparency in their work weeks ahead.

Get Results with Shiftlab

We’ve helped over 30,000 retailer professionals save time and reduce errors with our retail compliance software, delivering proven results. For one client, using our workforce management software increased $ 600,000 in operating income within the first 6 months, all due to improved break compliance.

For one client, using our workforce management software increased $600,000 in operating income within the first 6 months. All due to improved break compliance. 

Our Pulse dashboard shows daily trends and compliance metrics, providing valuable insights that make it even easier for retail managers to adjust as needed and ensure ongoing compliance.

Schedule a free demo to see our retail compliance software in action.

Retail Compliance Software FAQs

What is compliance in retail?

Compliance in retail means following labor laws, wage regulations, and workplace policies. Adhering to these rules helps ensure employees are treated fairly, and businesses operate within the bounds of the law.

These rules address overtime pay, meal and rest breaks, scheduling laws, and workplace safety. Staying compliant helps retailers avoid fines, lawsuits, and unnecessary labor costs.

Even better, they improve employee satisfaction!

What is the best compliance management software?

The best compliance management software automates overtime tracking, break enforcement, and scheduling adjustments.

These tools can help prevent labor law violations without forcing managers to do extra manual tracking work.

Shiftlab is a top choice because it provides real-time alerts, automated compliance checks, and centralized reporting for retailers.

Is there employee scheduling software for retail?

Yes! Retail-specific scheduling software, like Shiftlab, helps businesses create efficient schedules, prevent compliance violations, and manage labor costs with ease. Shiftlab also automates break scheduling, overtime tracking, and shift assignments.

These retail compliance software tools help ensure your business’s compliance with labor laws. At the same time, our tools also give employees agency over compliance, with mobile access to their schedules. 

This information is not intended as legal advice. You should seek specific legal advice before acting on the subjects mentioned herein.