Tag: HR technology

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How to calculate PTO hours + accruals

Summary

  • Paid time off comes in many different types, including vacation, sick leave, personal leave, and bereavement time. – More

  • Your company can also choose to have workers accrue their time off, offer PTO up front, or even offer unlimited time off. – More

  • No matter your company’s specific time off policy, automatic PTO tracking software calculates leave for you and ensures proper coverage. – More

Workers are finally starting to take more time off for vacation and rest, a pretty significant shift in America’s always-hustling working culture. According to a Korn Ferry survey in 2021, 79% of workers said they planned to use more vacation days that year than in years past, and 82% said they would appreciate more vacation time in our post-pandemic world.

Paid time off (PTO) has always been valued by employees. 76% of American workers feel that it’s very important their company provides PTO. Paid sick time (74%) and paid holidays (74%) are also very important among workers. 

Also read: Paid Sick Leave Laws by State

Employers can retain more workers, lower stress levels, and improve productivity among their workforce by developing a clear and fair PTO policy. But there’s no “one size fits all” approach to adopting the perfect plan for your company — you’ll have to sort out the right policy based on your workforce needs, then make sure you’re calculating time off banks correctly to help each worker get the time they’re entitled to.

Breaking down the types of PTO

There are a few different reasons why an employee might use their PTO. Depending on your company policy, they might use any available PTO day for any of these reasons, or they might have an allotment of days for each category.

  • Vacation: This is your run-of-the-mill bank of time for employees to use for day trips, staycations, travel, weddings, or the like. If it’s something they’re planning for, they’ll likely use vacation days.
  • Sick time: If an employee isn’t feeling well enough to work, they can take a sick day to rest up. Well-being also includes mental health; according to a survey by Breeze, 63% of respondents said they had taken a mental health day in the last year.
  • Personal days: Personal time is for when things happen outside the worker’s control. Maybe they’re stuck in a blizzard coming home from their in-laws, or they have to say goodbye to the family pet. Personal leave is there for life’s curveballs.
  • Parental leave: Companies aren’t legally required to offer paid parental leave, but some still offer it as a benefit to their workers. More businesses than ever were paying maternity and paternity leave benefits after the pandemic, but that trend is curtailing again. According to SHRM, 35% of companies offered paid maternity leave in 2022, and 27% offered paid paternity leave.
  • Jury duty: If an employee gets called in for their civic duty, their employer may choose to offer them PTO for at least part of their service.
  • Bereavement: Bereavement time is meant for employees who lose a loved one. Some companies only allow bereavement leave for close relatives. Workers can use this time to attend the funeral or other memorial services, or just take time for themselves to grieve without thinking about work.

How does PTO work?

You can allocate time off to your employees using a few different systems. In a traditional PTO format, workers accrue time off based on their hours or days worked. But more employers these days are leaning towards more flexible time off policies.

Accruing Time Off

With this type of policy, your workers will accrue time off based on every hour or day they work. The accrued time off will be added to their PTO bank, and they can take time off when they have enough hours banked. You can choose to lump all types of PTO together or distinguish between vacation and other types of PTO.

Usually, employees accrue different types of PTO at different rates. For example, for the year, your policy might grant ten days of vacation, five sick days, five bereavement days, and three personal days. Then, for each 40-hour workweek, employees will accrue their vacation time faster than their sick time, bereavement leave, or personal time. Employees with more years of service might also accrue more paid days of leave per year.

With an accrued time off policy, employees have to wait until enough time is banked to use their PTO. That means that you can’t just look at scheduling needs when weighing PTO requests — you’ll also have to track each worker’s banked PTO to ensure they have enough balance.

Unlimited Time Off

In an unlimited time off system, there’s much more flexibility for employees to take days off as they wish. There is no set number of days in an unlimited PTO system. Instead, employees can take off as many days as they’d like, for any reason, as long as the time off is approved by the company and they’re still fulfilling their individual responsibilities.

This flexibility can be a benefit to employees. There’s usually a level of trust that workers will take the time they need to stay rested and attend to personal matters while remaining productive at work.

However, an unlimited PTO policy also comes with some severe drawbacks. Studies show that employees, on average, take less time off under an unlimited policy than those who operate under a traditional policy. This is most likely due to a sense of guilt and other unspoken, toxic workplace stigmas around taking leave. 

Just like in a traditional accrued time off structure, managers and company leadership still have to approve time off in an unlimited policy. If you opt for this type of format, the difference is you won’t be looking at the hours available in an employee’s time off bank. Before you approve any leave, you’ll still typically review factors like workforce coverage, scheduling needs, and productivity.

Under an unlimited PTO policy, you also don’t have to pay employees for the time off they’ve accrued when they exit your company. In a traditional PTO system, you do owe workers for any unused PTO time that they’ve banked during their tenure. When an employee leaves, they’re usually entitled to a payout of the days of PTO they accumulated.

How to calculate PTO

Small-business and startup consultancy Bizfluent notes that calculating PTO by pay period allows organizations to evenly distribute an employee’s time off accumulation throughout the year.  Organizations with hourly or part-time employees should consider providing PTO based on the number of hours worked. When an organization calculates PTO hourly, it allows employers to award less PTO for hourly employees who do not report to work (for whatever reason) or for part-time employees who do not always work the same number of hours in a pay period.

One metric employers can follow to calculate PTO is dividing the annual PTO hours by annual work hours. For example, if an hourly employee earns 80 hours of PTO each year and works 40 hours a week, or 2,080 hours per year, divide 80 by 2,080. That works out to an employee earning 0.038 hours of PTO for each hour worked.

The PTO formula is:

Hours of PTO / hours worked each year = hours of PTO earned per hour worked

So in our above example, the organization’s PTO formula for this employee would be:

80 hours / 2,080 hours = 0.038 hours of PTO earned per hour worked

How to navigate common PTO challenges

Even if you set a clear PTO policy, there are bound to be situations or employee requests that fall outside of the policy that you’ll still have to balance. The key is to treat all employees fairly and accurately track PTO balances so you know exactly where you stand.

A sick employee has already used all their days.

Combining sick leave and vacation into one PTO category can lead to unplanned consequences for employees. If a sick employee has used all their PTO days, they might feel compelled to show up ill and risk infecting co-workers.

Help employees plan for this by offering guidance during onboarding or in posts throughout the year via internal communications about the importance of banking some PTO for sick days. For example, advise employees to consider paid time off as five days of vacation, four sick days or an unplanned emergency, and one day for a special occasion.

A new employee needs to use PTO days before accruing them.

Companies often hire employees with previous personal commitments for which they need time off after being hired. Prospective candidates often are honest and upfront about this as the hiring process progresses. 

Since most policies establishing how to calculate PTO makes it hard for employees to take time off in the early months of their employment, many employers will allow employees to “borrow” their PTO. Allowing 40 hours of borrowed time gives an employee a full week off. To avoid lump accumulations and to calculate PTO more accurately, companies can implement earning PTO incrementally with each pay period.

If you allow your employees to borrow ahead on their PTO plan, you’ll need to track the borrowed hours accurately. You’ll also need visibility into the rest of your attendance and scheduling to quickly identify and resolve any coverage issues, especially for unplanned absences like a death in the family.

Tracking PTO doesn’t need to be difficult

Effective leave management is crucial for shift-based workforces. For one, it promotes employee well-being and reduces burnout. It also keeps you compliant with various wage and hour laws in your state. But most importantly, handling PTO properly keeps shifts organized and lowers the chance of scheduling mistakes. 

You could manually approve, calculate, and track PTO across your workforce – this is fine enough for a small business. But one slight misstep can wreak havoc on timesheets and schedules. To save yourself the headache, utilizing an automated PTO tracker is a good idea. For shift workers, it is important that something like this be mobile-first and optimized for self-service; this way, the admin work is as non-intrusive as possible.

Mobile app that employees can use to request PTO

An app like this can do things like:

  • Automatically track leave balances
  • Calculate and apply PTO to timesheets
  • Prevent employees on leave from accidentally being scheduled
  • Allow employees to request leave and check their balances
  • Let managers review past and upcoming time off on a calendar
  • Allow managers to create custom accrual rates

Pretty sweet, right? If you want to learn more about how this all works, contact us today. 

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Why tattleware isn’t the solution for underperforming teams

Summary

  • Tattleware is not just intrusive; it is also ineffective, as your employees still have access to their own devices.

  • Employees who are being monitored can feel stressed and resentful, leading to higher turnover rates and lower productivity.

  • The use of tattleware makes your organization vulnerable to undesirable legal situations.

Employee monitoring has long been a topic of much interest and debate. In an attempt to find out the extent of employee productivity, employers have sought ways to keep tabs on their workers — from Henry Ford’s 1914 Sociological Department that was used to monitor practically every aspect (work and personal) of Ford workers’ lives to Elon Musk contracting a PR firm to monitor Tesla employees’ Facebook activity. 

As hybrid and remote work become more commonplace — spurred on by the COVID-19 pandemic — more employers are turning to employee monitoring software, also known as tattleware or bossware. Without the ability to physically see their employees hard at work at their desks, companies are turning to different apps, monitoring tools, and surveillance software.

According to a survey conducted by the IDC, 67.6% of North American employers with more than 500 employees are currently using employee monitoring software. In another study, ExpressVPN found that 78% of the employers it surveyed are using monitoring tools. 

Tattleware and monitoring software can take on many different forms. Some examples include monitoring:

  • When an employee steps away from their computer
  • Employees’ online activity (websites visited, time spent using specific software like Slack, etc.) 
  • What employees are typing and what keystrokes are being used
  • The topics of discussion amongst employees by taking screenshots or even screen recordings
  • The facial expressions of remote workers during video calls using video analytics tools (this supposedly helps employers determine who is contributing more than others in meetings) 
  • What employees are doing by watching and listening in through their laptop webcams or microphones

We spoke with Jon Hyman, a partner in the Employment & Labor practice at Wickens Herzer Panza, to get his take on the topic. He believes that “employers that try to regulate employees’ use of workplace technologies in this way are fighting a Sisyphean battle.” It is a futile and harmful practice that uses tech to police and punish employers instead of effectively addressing productivity issues.

Enforcement will always be a losing battle

One issue with tattleware is that it is actually quite ineffective in doing what it ultimately sets out to do – keep tabs on your employees. 

“I hate this type of employee monitoring. I call it the iPhone-ification of the American workforce,” says Hyman. “No matter your policy trying to monitor your technology and your employees’ related productivity, if your employees can take their smartphones out of their pockets to circumvent your efforts, how can you effectively police anything? Why have a policy you cannot police and enforce? It’s also incredibly creepy and intrusive.”

You have a performance issue, not a tech issue

Tattleware supposedly makes it easier for employers to identify employees who are slacking. But knowing the time spent on work tasks or whether they’re streaming the World Cup on another tab doesn’t tell you anything about why productivity is suffering. 

“Instead of regulating an issue you cannot hope to control, treat employees’ use of technology for what it is — a performance issue,” Hyman explains. “If an employee is not performing up to standards because he or she is spending too much time on non-work activities, then address the performance problem. Counsel, discipline, and ultimately layoff if the performance does not improve.” 

Employee monitoring breeds resentment and reduces employee engagement

“A slacking employee, however, will not become a star performer just because you limit their social media access, keep an eye on how often they shop on Amazon, or log their Spotify playlists,” Hyman says. Instead, “they will just find another way to slack off and will resent you for your intrusion of their privacy. Instead of wasting your resources to fight a battle you cannot win, reapportion them to win battles worth fighting.”

In its survey, ExpressVPN found that the use of tattleware can have negative effects on employee mental health and wellbeing. Most employees surveyed felt stress and anxiety about their employers monitoring their activities. Thirty-two percent of respondents said that they didn’t take breaks as often for fear of repercussions. 

The very tools that are meant to be addressing dips in productivity are ultimately breeding distrust amongst workers, reducing performance and employee engagement. 

In a period where employees are resigning in droves, how wise is it for your company to gain a reputation for spying on their staff? 

Employee monitoring can leave you vulnerable to legal issues

Although there are many employee monitoring service providers out there that work within the law, using tattleware can land you in some unpleasant legal situations. 

According to the law firm Skadden, there are five potential legal issues to consider before implementing tattleware:

  • Invasion of privacy. An employee could take legal action against you if your monitoring activities are found to be highly offensive or end up revealing facts about their personal lives outside of work. 
  • Unfair labor practice charges. Under the National Labor Relations Act of 1935, employers can be charged if their monitoring reveals information about labor organizing efforts. 
  • Employment discrimination. Tools like facial recognition software may reveal characteristics about employees that are legally protected. Facial expression tools may not take cultural differences into account and make unfair assumptions about certain staff members. 
  • Unpaid wages and overtime. Just because an employee isn’t at their computer, it doesn’t mean that they aren’t working. Using monitoring software to pay hourly employees could result in unpaid wages and overtime for time spent doing things like reading, writing, taking phone calls, etc. 
  • Workplace injuries. Monitoring software can lead to overworked and burnt-out employees. Physical injury may also occur. In March 2022, a large e-commerce company using monitoring tools was fined $60,000 for causing employees’ joint and muscle injuries. These injuries were a result of employees overworking in order to meet deliverables.   

Build an environment of trust instead of fear

“We ask so much of our employees, even more so during COVID. The 9-to-5 is no longer relevant. If my employee, who is giving up nights and weekends for me, wants to spend a few minutes during the workday posting to Facebook, or checking the score of last night’s game, or buying something on Amazon, I just don’t care. I only care when it reaches the level of distraction and impacts performance. Then, however, we are treating the performance problem, not the technology problem—which is the appropriate and practical solution.”

“To put it another way, if you don’t trust your employees enough to do their jobs, why are you employing them in the first place?” Hyman concludes. Ultimately, spying on your employees damages your reputation and breeds mistrust. A happy, productive, and engaged workforce is attainable through trust, transparency, and capable leadership.

An engaged workforce is a productive workforce

The best way to ensure your team stays productive and maintains good performance is to keep them engaged. Workforce management software sets you up to get the basics of employee engagement right. 

Scheduling must be done in a way that is fair, efficient, and transparent. It must be flexible, allowing for adjustments like shift swaps and shift bids to be made on the fly. You also need a precise time and attendance system in place that makes it easy for employees to review their hours and see what they’re owed.

For more tips on how to drive employee engagement, watch our webinar – How to Drive Engagement for Hourly Employees

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Employee or contractor? 6 worker misclassification FAQs

Astronaut Dog Thinking

Summary

  • Misclassifying full-time employees as independent contractors can lead to legal and compliance issues down the line. 

  • There are a number of ways to determine whether or not a worker should be classified as an employee or contractor. 

  • Aside from seeking legal counsel, employers can use workforce management solutions to stay compliant with labor laws and properly classify workers. 

The number of freelancers and independent contractors is growing steadily in the United States. McKinsey found that approximately 58 million American workers, or 36% of the American working population, consider themselves to be independent workers. This figure is expected to reach 90.1 million by 2028. 

With this rise in contractors in recent years, worker protection laws are shifting to reduce incorrect worker classification.

Worker misclassification is when a company hires individuals as self-employed or independent contractors to carry out the tasks of a full-time worker. 

To learn more about the misclassification of employees and its implications, we spoke with Hinshaw & Culbertson law partner Aimee Delaney.

What exactly is worker misclassification?

“Misclassification is a term that is used when an employer incorrectly identifies an individual or position as an independent contractor when the individual is really an employee,” said Delaney. 

According to Delaney, there are a number of circumstances that can motivate employers to classify individuals as contractors: 

  • Independent contractors are not subject to state and federal wage laws, which means they are not entitled to overtime if they work over 40 hours a week. 
  • An employer does not have to pay the employer portion of payroll taxes and does not make withholdings for an independent contractor. 
  • An independent contractor is also not entitled to benefits such as workers’ compensation or unemployment benefits from the organization that the individual contracts with. 

“Misclassification does not require bad intent to be a violation,” said Delaney, “so even if it was an honest mistake, it can still present a violation of law.”

Delaney added that the definition of an employee, as opposed to an independent contractor, lies with the employer. It should evaluate whether it has employees on the payroll who are performing the same work and function as the independent contractor. A good follow-up to that question is will the independent contractor be performing the main work of the business.

“Answering these questions in the affirmative is usually a sign of trouble,” Delaney said. “So if I run a home health business and have a staff of 25 home health workers but want to bring on three more as independent contractors, you are probably well on your way to misclassification.”

Delaney said the home care and home health industry can suffer from labor shortages. While trying to use independent contractors to address a shortage of workers may be tempting, it can also be risky, she said.

“Staffing agencies would be a better resource in that scenario, as it avoids the misclassification issue,” Delaney said. “You may not be able to avoid a joint employer issue, but at least you should avoid the misclassification issue.”

Why does employee misclassification matter?

Employee misclassification is bad for business, bad for workers, and bad for the public sector. According to the U.S. Department of Labor (DOL), misclassified employees lead to lost government contributions that should be going towards things like state unemployment insurance and workers’ compensation insurance.  

While employers might attempt to incorrectly classify their employees to avoid having to deal with tax withholding, the financial and reputational consequences of doing so greatly outweigh the savings.

Workers who carry out the role of employees but are contracted as freelancers are not entitled to the same rights and benefits. They are not eligible for things like paid vacation and sick leave and can be laid off much more easily.  

Independent contractors are also responsible for paying their own Social Security and Medicare through the Self Employment Tax (SET).

How do employers typically classify a permanent employee versus an independent contractor? 

When an employer hires a permanent employee, that person is expected to devote their full workday to the tasks they are given by the employer. Permanent employees cannot work for other organizations at the same time. 

The employment relationship between a company and an independent contractor, on the other hand, is of a different nature. According to Delaney: 

An employer will typically only have an independent contractor for some type of special project that falls outside of the normal business conducted by the operation. For example, a law firm may need to upgrade its document management system and retain a third-party vendor as an independent contractor to complete the project. The contractor is not performing the work of the law firm, the law firm does not exercise control or supervision over the vendor and only controls the ultimate product. This concept is also separate from the concept of temporary staffing, which relies on the use of temporary workers that are employed by a third party.

The  California law Assembly Bill 5 (AB-5) clarifies the difference between employee and contractor in the state. The California Supreme Court requires the use of the ABC test, outlined on the ca.gov website, which assigns three conditions that must be met to consider an employee as an independent contractor:

  • The worker is free from the control and direction of the hiring entity in connection with the performance of the work, both under the contract for the performance of the work and in fact;
  • The worker performs work that is outside the usual course of the hiring entity’s business; and
  • The worker is customarily engaged in an independently established trade, occupation, or business of the same nature as that involved in the work performed.
(Source: https://www.labor.ca.gov/employmentstatus/abctest/)

Also read: Ease compliance concerns with workforce management software

What is the advantage for employers to classify their workforce as independent contractors? 

Some employers think worker misclassification is worth it because contractors are more affordable. But Delaney says the risks involved outweigh the perceived benefits:

“There is no advantage to employers if the classification is not correct, because the risk and liability will generally outweigh any benefit. If the classification is appropriate, the advantage is often a lower cost with a known end date. As noted above, independent contractors are not subject to state and federal wage laws, so they are not subject to the minimum wage and overtime requirements.”

What should employers know about defining their workforce to avoid misclassification? 

“Employers must be aware of the key concepts and tests that are applied to determine whether independent contractor status is appropriate,” says Delaney. “These are the tests that will get used by the Labor Department, the Equal Employment Opportunity Commission (EEOC), the IRS, etc. In some form or fashion, these tests all look to the level of control exercised by the organization over the individual and the economic realities of the relationship.”

If you are using the services of independent contractors, Delaney recommends that you carry out regular audits to make sure that you are doing so in a compliant way. If you do find cases of misclassified employees, you will also need to assess whether any overtime wages are owed to them.  

Also read: What employers and HR should expect from new Labor Secretary Marty Walsh

Is employee misclassification a growing trend in wage and hour/overtime violations? If so, why is that?

The wage and hour laws stipulated in the Fair Labor Standards Act (FLSA) do not apply to independent contractors. Because of this, companies with misclassified workers are often found guilty of breaking wage and overtime violations.

If a worker is found to be misclassified, their employers might end up owing them significant amounts of money in back wages. 

Stay compliant with a workforce management tool

Navigating federal and state laws around labor codes and employee classification can be tricky. The language is complicated and misinterpreting it can lead to mistakes that break the bank and your reputation. So when in doubt, seek legal advice. 

Workforce.com can help with our powerful wage and hour compliance platform. It accounts for federal, state, and regional wage laws when paying salaries, even in situations where your staff might be distributed around the country. And most importantly, an automated workforce management system helps you maintain an accurate paper trail for whenever external audits come knocking. With detailed labor records, you can rest assured that misclassification accusations will never catch your organization off guard. 

Book a demo today to keep your time tracking and scheduling air-tight. 

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Is your employee attendance policy and procedure fit for purpose?

Summary:

  • Lateness and absenteeism are early warning signs of a deteriorating attendance policy. — More

  • No-call, no-shows are becoming increasingly prevalent. Every organization needs a clear-cut procedure to mitigate the repercussions of them. — More

  • Automating the way you collect attendance data helps solidify your attendance policy. — More

Dealing with employee attendance can be tricky. You need your team to respect your company’s start time and adhere to predefined work hours. And you need to implement corrective action in the case of tardiness and no-shows. Any disciplinary action needs to be taken at the time and level that best suits your work environment and culture. 

Employee absenteeism and tardiness are bad news for any business and can reduce overall productivity and work quality. 

This is where having a comprehensive employee attendance policy is essential. It informs your employees of what is expected from them, and it helps your human resources team adhere to predefined discipline processes. 

The rise of remote and hybrid work due to the COVID-19 pandemic has made it even more complex to define and monitor work schedules. Businesses that already have company attendance policies will likely need to revise them to take these changes into consideration.     

Lateness is your early warning system

A one-off instance of lateness may be understandable, but if it becomes a recurring problem, it can be an early warning of potentially serious issues with a worker, team, or department.

Tardiness is the most common time and attendance issue facing businesses. Studies have shown that, on average, a quarter of US employees report being late for work at least once a month. Younger employees are more likely to struggle with punctuality — 38% of those aged 34 or younger are late once a month or more. On the other hand, only 14% of workers aged 44 or older turn up late to work at least once a month. Almost half of US employers — 43% — fire employees for lateness each year.

The key is not to focus on individual instances of lateness but instead identify problematic patterns and prevent them from becoming systemic. For example, there may be a specific employee who is persistently late. You may notice a particular department or location with repeated poor timekeeping. Using time and attendance software makes these patterns easy to spot and gives you data-backed insight into the problem.

Your employee time and attendance policy and procedures should insist that employees who are running late inform their manager within a clear time frame. Your policy should also clarify what frequency of lateness will incur penalties and what the disciplinary response will be. Given that lateness is so endemic, some companies build some leeway into their tardiness policy, allowing a 10-minute grace period before an employee is officially marked as late.

As long as managerial leniency doesn’t undermine your attendance policy, there are benefits to reaching out to persistently late employees to see if the company can help resolve the issues causing their problems. Implementing flexible work, such as shift swaps, can help with employee retention and reduce lateness.

 

Webinar: How to Drive Engagement

 

Absences require a nuanced approach

The cost of staff absence is much more visible than the cost of lateness. In January 2022 alone, 7.8 million US workers were absent from work due to health-related issues, such as injury, illness, or medical appointments. This is significantly higher than the 3.7 million workers who took sick leave a year earlier.   

At a strategic level, dealing with individual absences requires a nuanced approach. While granular attendance data is great for identifying problems, it should always be backed up with direct staff communication.

The latest US government statistics on employee absence show that the average absence rate nationwide was 3.2%. Excessive absenteeism above the national average suggests a problem with company culture. Either employees are unhappy in their work, or they are getting too comfortable with exploiting ineffective managerial attendance policies. 

The more detailed your data, the more precisely you’ll be able to identify the problem areas. If your company’s absence rate is noticeably lower than the average, say around 1.5%, that may not be cause for celebration. People will get sick, and the hidden risk of low absence rates suggests these sick people feel unable or afraid to request excused absences for sick days and are bringing their illness to work.

Know your absence rate

If you’re not using time and attendance software to keep track of your absence rate, it can easily be worked out by dividing the number of days or hours lost to absence by the number that should have been attended, then multiplying the result by 100. 

For example, an employee who is expected to complete 260 workdays per year but is absent for five of those days would have an absence rate of 1.9%. The same formula applies to individual workers, departments, or the whole business. You can now compare your absence rate to the national average to see how your business is faring.

Absence rates should always be considered in the context of absence frequency. For example, one worker may be off for 10 consecutive days. Another worker may call in sick on 10 Fridays during the year. Both would have the same absence rate, but the frequencies tell different stories — the first worker may have been seriously ill, while the second likes to have a long weekend. Your procedure should empower managers to take that into account when deciding what action to take.

That’s why it’s important to clarify which types of leave and absence you consider legitimate in your employee attendance policy. The policy should also specifically state how much warning employees are expected to give if they can’t come to work. For example, they should get in touch before 9:30 a.m. or at least an hour before they’re meant to clock in. You may require a doctor’s note after a certain amount of sick days, or you may have a different policy for emergencies or jury duty, for example. 

Of course, the day-to-day implementation of your absence policy will always be down to the manager’s discretion, but setting clear guidelines will prevent confusion on both sides. You will also need to familiarize yourself with and adhere to local, state, and federal laws, such as the Family and Medical Leave Act (FMLA). This allows eligible employees to take unpaid and job-protected leave for certain medical situations. 

“No call, no shows” are the worst-case scenarios

A “no call, no show,” also known as an unexcused absence or unscheduled absence, is when an employee simply doesn’t turn up for their scheduled shift and gives their manager no warning. These are the most serious of all attendance infractions. The lack of notice exacerbates all the costs and inconveniences of a normal absence, which means it needs to be treated especially carefully and thoroughly.

In an economy struggling to deal with phenomena such as the Great Resignation and quiet quitting, maintaining regular attendance is more crucial than ever. There are 10.3 million job openings in the US right now, with hospitality and other shift-based roles especially affected. 

Team members with low employee morale have never been more empowered to simply walk away — sometimes without even going through a formal resignation procedure.

If an employee fails to show up for work on consecutive days with no contact, that is considered job abandonment and is widely seen as reason enough to fire them. Be sure to make it clear in your policy exactly how many days absent will count as abandonment. Three is generally considered standard, but check state case law for any local precedents that have been set.

Therefore, your employee attendance policy needs to be explicit about repercussions for a no-call, no-show absence. Some companies make it cause for immediate termination. Others use progressive, points-based discipline measures that usually go from a verbal warning to a written warning and eventual termination. Be careful assuming the worst, however. For a first-time offense, communicate with the employee. It may just be a hangover, or it could be an issue with a family member. Be firm, but check the facts before dropping the hammer.

Employee attendance policies and procedures protect your business

Once you have closed the gaps in your employee attendance policies and procedures, apply them consistently. Penalizing workers for lateness while always letting a manager leave early sets a bad precedent that can backfire. The more airtight your policies and procedures and the more accurate your attendance data, the less risk of legal exposure for your business.

Having an explicit procedure to follow is particularly important when job terminations are involved, as this is an area where unfair dismissal suits can become public and messy. For example, in 2020, there was a high-profile case of a Boeing employee who was given a “last chance agreement” following repeated attendance infractions. The employee then took time off and didn’t return to work afterward. He was fired, but he sued, saying he had been fired for taking the leave, not his attendance record.

Evidence of repeated clear infractions of an established policy, backed up by incontrovertible evidence of repeated lateness or non-attendance, was what convinced the 3rd Circuit Court to dismiss the case against Boeing—and the same combination of policy, procedure, and data is your best defense against this kind of suit as well.

Collecting good attendance data helps keep your policy airtight

Workforce.com can not only gather that attendance data automatically, but it can also alert managers to staff that repeatedly fail to show up on time. This automation gives managers actionable data they can use to stay ahead of frontline issues. 

Webinar: How to Reduce Absenteeism

If you are ready to see what Workforce.com can do to help your time and attendance policy, book a call with us today or try the platform for free. 

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8 Pros & Cons of Biometric Time Clocks

xYou arrive for work, walk up to the door and look into the scanner. Infra-red light maps the unique patterns of your retina and, in the literal blink of an eye, your presence is verified, logged, and the door unlocks. This scenario used to be limited to high-security government installations and blockbuster spy movies, but the use of biometrics such as fingerprints and retinal scans to access everyday workplaces is fast becoming the norm.

In a 2019 study, more than a quarter of small North American businesses were using thumbprint scanners as a way of confirming identity, a number that leaps to over 40% for companies with more than 1,000 employees. Even retinal scanners, with their lingering science-fiction reputation, are being used by more than 10% of companies.

Biometrics is a rapidly evolving technology, and if you are considering investing in a biometric time clock system for your business, there are some pros and cons to weigh before making a decision.

The benefits of a biometric time clock

Biometrics offers considerable advantages over analog time clock systems such as punch cards or keycards, and it can improve accuracy, efficiency, and security across your locations.

Biometrics eliminates “buddy punching”

The biggest advantage from a company perspective is that biometric time clocks only work for the employee in question. This makes the common fraudulent practice of “buddy punching,” in which shift workers clock in and out for each other, all but impossible. Whether using fingerprints, palm prints, or retinal scans, biometrics requires the relevant person to be physically present. The only way to clock in for an absent colleague using this system would be to have their eyeballs or fingers, and there aren’t many work buddies willing to go that far to shave a few hours of their working day!

Biometrics improves on-site security

This also means an increase in security and safety. You can be sure that the person gaining access to your premises under a biometric system is who they say they are. It isn’t foolproof—employees can still hold the door open and allow others access—but the chances of anyone using a lost or stolen keycode or card to enter your workplace is gone.

Biometrics streamlines shift changes

Biometric time clocks can also increase efficiency in several areas. Employees don’t need to remember passcodes or keep track of a physical key card, which means your company doesn’t need to spend time and resources providing and managing those measures. The shift change process can also be sped up, as employees can clock in and out more quickly without typing in codes or fumbling in wallets for cards, reducing time-wasting bottlenecks.

Connecting biometric time clock systems to time and attendance software has advantages for employees, too. Being able to prove beyond doubt that they were on-site at specific times means that claims for unpaid overtime are much easier to prove. That, in turn, gives your managers the tools to ensure that payroll is correct, reducing the risk of wage and hour lawsuits.

 

The potential pitfalls of a biometric time clock

Biometrics is still an evolving technology, and it may still produce practical and legal hurdles for businesses to handle. If you introduce a biometric time clock now, you will need to consider a new range of accessibility issues as well as taking on additional data admin work with the possibility of further changes in the future.

Biometrics can limit access for disabled employees

Where employees with disabilities are concerned, companies should be especially alert to their practical access needs. If an eye-level retinal scanner is used to access the workplace, how will that impact wheelchair users? If access is via a palm or fingerprint reader, how will employees with limited or no visibility know where to place their hands? The Americans with Disabilities Act requires companies to make all reasonable accommodations for people with disabilities to access premises, even just for job interviews. While there have been exploratory studies raising concern on this issue, there has yet to be a test case involving biometrics. You don’t want your company to be the one setting that precedent.

Biometrics can require new data handling systems

Data privacy is already something companies need to be on top of, and the use of biometrics will only increase that burden. Although there is no federal law governing the use and storage of biometric data, several states have enacted their own, and it is only a matter of time before others follow suit. Texas and Washington have laws governing general biometric data use, while New York has labor legislation that covers it specifically for workplaces. Passed in 2008, the Illinois Biometric Information Privacy Act (BIPA) is the leading template for this kind of legislation, so it is useful to be familiar with what it requires from employers.

Under BIPA, companies must have a publicly available written policy that lays out how biometric data will be used, stored, and deleted. Employees must be sent written confirmation that their biometrics are being collected and how long they will be stored. Employees must also give written consent for this to happen and give separate consent for this data to be shared with third parties. Employee biometric data must be safeguarded and should not be used for profit-making.

Biometric data law violations are costly

As of 2018, more than 50 companies were facing lawsuits filed under BIPA with penalties that can quickly stack up—$1,000 per violation caused by negligence, such as inadequate data security, and $5,000 for every deliberate infraction, such as selling the data to third parties. There have been some high-profile results. Early in 2021, Walmart was hit with a $10 million settlement following a BIPA class-action suit involving 21,677 employees who used a palm scanner when handling cash register drawers without being asked for consent.

In another 2018 case, Smith Senior Living settled a lawsuit brought by an employee who was not made aware that her fingerprint data used to clock in and out of shifts was being stored in a database by Kronos Inc., the external supplier of the biometric systems. Any biometric time clock that shares data with an external platform—such as time and attendance software—means you should get explicit consent from employees to avoid legal exposure.

 

Biometric time clocks require companies to earn trust

Since biometric data is uniquely personal, it stands to reason that people will see the collection and use of that data in more personal terms. As an employer introducing biometric time clocks, the onus will be on you to build trust and put systems in place that reassure your staff you can be trusted with this information.

Legal challenges such as the one Walmart faced are likely the thin end of the wedge when it comes to concern from the general public over the use of biometrics. A 2018 survey found that 69% of respondents felt there were strong arguments against biometrics, with worries about the data itself being the most common.

A case was brought against Honeywell in 2015 for encouraging employees to sign up for a wellness program that included biometric screening in order to qualify for health insurance. The tests included cholesterol, waist size, and smoking history. Those who opted not to take part risked thousands of dollars in penalties and lost contributions. The Equal Employment Opportunity Commission (EEOC) filed the suit saying it violated the Americans with Disabilities Act and the Genetic Information Nondiscrimination Act by forcing employees with disabilities to reveal medical information for purposes not required by their work.

Although the Honeywell case was not related to biometric time clocks, it is inevitable that some employees will see any introduction of biometrics into the workplace as a prelude to punitive personal scrutiny. These are paranoid times, especially where matters of health and privacy are concerned, and some may even assume that their data will be misused regardless. It’s up to you to convince them this isn’t the case.

 

Biometric time clocks aren’t vital for every business—yet

Although the use of biometric time clocks is growing, with the pandemic driving takeup of contact-free retinal scanners in particular, that doesn’t mean it’s the right call for every business to adopt this technology. Biometric time clocks are especially useful for businesses that rely on hourly shift workers. Keeping track of lots of staff coming and going, without causing bottlenecks as people clock in and out, is a boon to companies operating on that model. Producing accurate data for payroll and efficient staff management is another bonus.

This is also a system that can be implemented gradually, used for access to specific locations that need additional layers of security or accountability. Or it may not be right for your business at all, right now. Biometrics in the workplace, whether for time clock purposes or other reasons, requires the introduction of new data security systems and the additional admin load of handling employee consent and the deletion of data when staff leave. Add in the still-evolving legislative landscape where biometric data is concerned, and adopting a “wait and see” approach is a valid strategy.

Whatever you choose, this is a technology that managers need to be familiar with as it appears in more everyday workplaces and will no doubt play a much larger role in the future. For those who do invest in biometric time clocks now, be assured that Workforce’s time and attendance software will integrate with your new system for a complete and secure solution.

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Shift bids vs shift swaps – which is right for your business?

Being flexible with shift work is good for business. Even before the pandemic created a nationwide staffing shortage, employees were making it clear that a better work/life balance was becoming a top priority.

A 2019 survey (https://www.prnewswire.com/news-releases/new-research-shows-that-flexible-working-is-now-a-top-consideration-in-the-war-for-talent-300818790.html) by IWG found that 80% of workers would choose a job with a flexible schedule over one that did not, and more than 30% considered flexibility more important than extra vacation days or a prestigious job title. In addition, a different survey (https://www.flexjobs.com/blog/post/survey-flexible-work-job-choices/) in the same year found 80% of workers would be more loyal to their employer if they had more flexibility over when they worked, with over half trying to negotiate adding this perk with their current manager.

There are two popular ways to inject flexibility into your shift scheduling: shift bids and shift swaps. While they appear similar, they differ in subtle but important ways, and the right one for you will depend on the specifics of your business.

Shift bids and shift swaps – what’s the difference?

Put simply, shift bids are when the manager invites workers to put themselves forward for open shifts. Shift swaps allow workers to arrange to take each other’s shifts directly.

Shift bid example: A retail worker informs the manager that they can’t come in as scheduled on Friday because of a medical appointment. The manager chooses which staff members are best suited to fill that shift and lets them know an extra shift is up for grabs. The manager then chooses who will take the shift from those that express an interest.

Shift swap example: A restaurant worker has a childcare emergency and can’t come in for their scheduled afternoon shift, so they ask their colleague to swap shifts. The colleague agrees, and they present the solution to their manager, who approves it.

Each approach has the desired result: the empty shift is filled. Both are also easily implemented with the right scheduling software, but which method works best for your business depends on several factors.

 

Shift bids keep the manager in control

There are benefits and limitations to shift bids that you should be aware of before considering using them.

Benefits of shift bids

  • The manager gets a choice of different staff members to fill a shift and can pick the best suited. This helps maintain a well-rounded shift with employees who possess all the required skills and experience and work well together.
  • Managers using shift bids may also keep an eye on who is close to working overtime and favor those with fewer hours on the clock, thus controlling costs and spreading available work more evenly.
  • A shift bids system can expand to fill all shifts, not just absences. Workers can rank all available shifts according to their preference, and the manager can use that data to put together a schedule that accommodates as many people as possible.
  • Staff using shift bids have more control over when they work by only putting themselves forward for shifts that fit around their life.

Limitations of shift bids

  • The shift bids approach won’t suit every worker, and some can find the need to bid for their shifts to be stressful.
  • Shift bids can be prone to favoritism and need to be carefully monitored to ensure bids are being handled fairly. This is an area where scheduling software can help, as you can easily check your shift data over time and identify patterns where certain staff members are scheduled – or not – more than others.

Shift swaps can be quick and painless

Shift swaps are simpler to manage than shift bids, but have other pros and cons worth considering.

Benefits of shift swaps

  • By having staff arrange coverage between themselves, shift swaps save the manager’s time.
  • With reliable staff, shift swaps can solve many scheduling issues before they even become a problem.
  • Shift swaps are better suited to solving urgent staffing needs, such as last-minute absences, as they don’t require employees to go through the bidding process.

Limitations of shift swaps

  • The manager has less control over who takes a shift, so unbalanced staff rosters are a risk.
  • Unregulated shift swaps can be prone to over-use by employees and require a robust company policy to clarify the conditions under which shift swaps will be approved.

Choosing the right approach for your company

The scheduling method best suited to your company will depends on several factors.

Company culture

In environments where top-down management is the norm, shift bids are likely to be a better fit. But in businesses where employees are used to having greater autonomy, they’ll likely prefer to arrange shift swaps themselves.

Company size

The larger the company, the more effective shift bidding becomes, as having more staff available to bid on shifts means more choice for managers. And vice versa; the fewer staff members there are, the fewer variables the manager has to keep track of when shifts are swapped.

Worker and managerial experience

A shift swap system works well for companies or locations with reliable long-term staff. For that reason, shift swaps can also benefit new managers or managers who are unfamiliar with all the employees, as it means there is less need to match workers to shifts personally.

All these factors are prone to change over time, but resist the temptation to mix and match shift bids and shift swaps at the same time. Instead, it is better to pick one flexible scheduling system and stick with it for clarity for staff and simplicity for managers.

Flexible shifts help attract and retain staff, and whichever way you approach them will require well-thought-out processes. However, if the practical complexities still seem intimidating, remember that scheduling solutions such as Workforce.com can help automate and track shift bids and shift swaps, freeing up valuable time and headspace for managers.

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The 10-minute guide to 2021 labor law compliance

Labor laws are a potentially lethal minefield for companies, particularly in today’s turbulent labor market, as the cost of labor law compliance failures can be enormous.

Labor law fines tend to stack per infraction so with large employee numbers the financial risk can grow exponentially, as with the recent high profile example of New York City suing Chipotle (https://edition.cnn.com/2021/04/29/business/chipotle-nyc-lawsuit-labor-law/index.html) for $151 million over 600,000 labor law violations accumulated within the city. In Tennessee, a home health care provider misclassified fifty workers as independent contractors rather than employees and was hit with a $358k penalty (https://www.workforce.com/news/worker-misclassification)by the Department of Labor to make up back wages and overtime.

Ignorance of the law is no defense, so even in situations where labor law compliance is complicated by different federal, state, and city rulings, it’s up to companies to stay on top of what is required. In situations where federal and local laws differ (i.e., the state minimum wage is higher than the federal), companies are expected to adhere to whichever is most stringent (i.e., they would have to pay the higher state minimum wage, not the federal).

It’s all too easy to make labor law compliance mistakes, but awareness of your responsibilities and impeccable record keeping will help to protect your company. Here are the key areas to keep in mind.

Minimum wage

Minimum wage laws are getting a lot of attention at the moment, with President Biden’s executive order raising the salary for federal workers to at least $15 per hour being seen by many as a prelude to a nationwide rise in minimum wage levels. Compliance with these laws can seem cut and dried, but there are aspects unique to some industries that you should be aware of if they affect you.

For example, industries where workers earn tips have a unique minimum wage law to follow, called Minimum Tipped Wage. “Minimum tipped wage makes it quite a bit more complicated,” says Workforce’s chief strategy officer Josh Cameron. “In hospitality or anything where you earn tips, you can pay the staff a minimum wage much lower than the normal one. So it would be $7.50 an hour if they’re not tipped, but it’s $2.50 if it’s tipped. As long as they get enough tips to get them over that—it’s called the tip credit—then they can receive the lower $2.50 per hour from their employer.”

There are reasons to keep on top of minimum wage laws beyond the threat of fines. For example, 29 states currently require a minimum wage higher than the federal standard, and you are obliged to pay the higher sum. Underpaid workers are unlikely to show any loyalty to a company, and underpayment can cause PR problems as well. “An underpayment scandal can bring companies to their knees,” says Andrew Stirling, head of product compliance at Workforce.com. “Customers can decide to take their business elsewhere. People are less likely to visit a restaurant or shop that has been reported for underpaying their people.”

Paid and unpaid breaks

One of the areas of labor law compliance with the least clarity is breaks for workers, making it especially important for companies to err on the side of caution. The legal requirements can be found on the Department of Labor website, but there are significant areas of ambiguity to watch for:

  • Federal law does not require companies to offer lunch or coffee breaks.
  • Where short breaks are allowed by a company, short breaks (i.e., toilet use) of up to 20 minutes should be paid.
  • Breaks of 30 minutes or longer (i.e., lunch) are considered outside of workable hours and do not need to be paid.
  • Waiting time or on-call time does not count as a break and should be paid.

“There’s this gray area,” says Josh Cameron. “Say you take a break for 21 minutes, is that paid or unpaid? Is it okay to make that unpaid? If you’re a lawyer looking at this, it’s really an opportunity because you can say, ‘This employee always had a 23-minute break, always had an 18-minute break, and they never got paid for it. Maybe they should have been.’ That’s something that employers should really be aware of and keep an eye on.”

This is an area where accurate and exhaustive employee data can really help, and if your company still relies on timecards and manual spreadsheets or pen and paper logs to track breaks, you could be leaving yourself open to big problems in the future.

Paid and unpaid leave

Thirteen states, plus Washington DC, currently require private companies to offer paid sick leave. The Families First Coronavirus Response Act added an additional responsibility for companies with less than 500 employees to allow workers to take paid time off if infected with COVID-19, to isolate following contact with an infected person, or to care for a family member. The same act also introduced a tax credit to offset the loss for affected companies.

California, New Jersey, Rhode Island, and Washington have all passed laws that also require paid family leave, and President Biden’s administration has set its sights on a federally mandated period of 12-weeks paid leave that would allow, for example, parents to take time off to care for newborn babies or other family needs.

For now, the only federal law involving medical and family leave is the Family and Medical Leave Act, which requires employers with more than 50 staff to offer 12 workweeks of unpaid, job-protected leave in a 12-month period for:

  • The birth of a child, adoption, or fostering of a child
  • A seriously ill spouse, child, or parent
  • A serious health condition that makes the employee unable to perform the essential functions of his or her job
  • Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty;” or Military Caregiver Leave—26 weeks in a 12-month period to care for an injured or seriously ill spouse, son or daughter, parent, or other next of kin who is a covered service member

This is an area of labor law compliance that is only going to become more prominent in the coming years, so shrewd managers should ensure they are on top of current requirements, which are largely dependent on where you operate and how many staff you have, and be prepared for change.

Healthcare

Another area of labor law that has been fraught with political debate, the Affordable Care Act requires that if an employee works more than 30 hours a week over any single year look-back period, then the employer must provide health insurance. While the ACA is a federal law, the portion of the medical insurance that the employer has to pay is determined by the state. In New York, for example, the employer must pay 80%.

The 30 hours a week cut-off requires particularly careful management where shift workers are concerned, as their hours may fluctuate over time. “This whole area is a big pain point,” explains Josh Cameron. “It’s a very difficult conversation to have with an employee that has become eligible for healthcare, then loses that eligibility the next year. Taking it away from someone feels very harsh to the employee.”

Keeping track of employee hours and keeping accurate records is yet again a vital part of compliance for companies here. Qualifying for healthcare is a strong motivator for retaining staff, but for those companies that are concerned about shouldering the additional costs, Workforce.com can be calibrated to warn managers when employees reach the 30 hours threshold and can even prevent managers from publishing schedules that extend past 30 hours.

Predictive scheduling

A recent addition to the labor law conversation, predictive scheduling laws – also sometimes known as “fair workweek” – place restrictions on how shifts are assigned and require companies to give advance notice of new schedules.

Two states – Vermont and Oregon – and eight municipalities – San Francisco, Berkeley, Emeryville, San Jose, Seattle, New York City, Chicago, and Philadelphia – have passed such laws, and more states and cities are considering legislation in this area. The specifics of the laws vary from region to region, but the core principles are:

  • A minimum notice period for upcoming schedules (usually two weeks) with compensation for workers who are not given enough notice of their schedule or changes to that schedule
  • A ban on “clopening,” meaning that a staff member working the closing shift cannot be scheduled to work the opening shift the next day
  • Mandatory rest periods that vary from between 9 to 11 hours between shifts

Failing to maintain compliance with these laws is expensive. The Chipotle example mentioned earlier, in which NYC sued the fast-food chain for $151 million, was caused by hundreds of thousands of predictive scheduling infractions across its many locations in the city.

Even if your business is not based in a state or city with predictive scheduling laws, it is still worth adopting the principles behind them. Partly because these laws may yet impact your business, but also because they have had a notable improvement on staff retention and job satisfaction.

Discrimination laws

There are thankfully few employers looking to openly discriminate in their hiring processes these days, but you should still be aware of which groups the law applies to when hiring and firing, as well as setting the terms of employment and how much people are paid.

  • The Equal Opportunity in Employment Act covers all the areas of discrimination that are forbidden. This concise PDF from the Department of Labor spells out everything employers should know.
  • The Americans with Disabilities Act (ADA) applies to companies with 15 or more employees and makes it illegal to discriminate in employment on the basis of a person’s disability. This also requires companies to make “reasonable accommodation” to allow a disabled person to work there, including making modifications to the working environment to not only allow disabled people to work there but also participate in the application process.
  • Ever since the Civil Rights Act of 1964, there have been several laws and amendments which make it illegal to discriminate against anyone because of their Ethnicity, Gender, Race, or Religion. Nationality is also a protected category, so, for example, it would be illegal not to hire someone because they were from Poland, regardless of their race or ethnicity.
  • The Age Discrimination in Employment Act offers protection to employees and applicants on the basis of their age. This law applies to anyone aged 40 or older, a far younger cut-off than many companies realize.

Labor law compliance is easier with good record keeping

If this all seems like a lot to keep track of, you’re not alone. The USA has relatively light-touch regulations for businesses compared to Europe, for example, but that doesn’t mean the task of staying compliant with labor laws can’t feel overwhelming—especially if you’re new to management and dealing with all of this legislation for the first time.

Regardless of which law is involved, one of the recurring causes of labor law breaches is poor record keeping. There’s one surefire way to ensure that your labor law compliance is rock solid, and that’s to keep excellent data. While it’s possible to maintain your records the old-fashioned way, with paper and pen or spreadsheets, the potential for human error is high.

When the cost of non-compliance can be so steep, using dedicated staff management software like Workforce.com to track staff hours and automatically flag labor law compliance issues offers much-needed peace of mind.

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Communicating the needs of the frontline workforce

frontline workforce, Boost your managers’ effectiveness with an essential mobile clock-in tool

Cristian Grossman may be a newly minted author with the recent release of his first book, “The Rise of the Frontline Worker: How to Turn Your Frontline Workforce Into Your Biggest Competitive Advantage.”

But the co-founder and CEO of Beekeeper, a mobile collaboration platform, also has toiled as a frontline worker. A former waiter, factory worker and chemical engineer, Grossmann meshes his time in the trenches with his entrepreneurial savvy to argue that technology is imperative to making frontline workers more effective employees.

From health care to manufacturing to retail employees, Grossmann deftly addresses the importance of frontline workers. Since the pandemic began, millions of North America’s frontline workers found themselves in the spotlight for the first time, with appreciation initiatives in almost every city. Despite the recognition, Grossmann argues that the reality is many frontline workers don’t have the support and tools they need to do their jobs.

Workforce caught up with Grossmann for an in-depth Q&A in the days leading up to his company’s “Frontline Future” virtual conference on May 6.

Workforce: Define a frontline worker.

Cristian Grossmann: Frontline workers are employees who do not sit at desks or work at computers. Their jobs are most often mobile, like sales associates, first responders, construction workers and restaurant servers. As their name implies, they are on the frontlines of their company, either in a customer-facing role or a hands-on role, like a production worker in a manufacturing facility.

What many people don’t realize is that frontline workers actually make up the vast majority of the world’s workforce. In the United States alone there are approximately 50 million frontline workers. Worldwide there are about 2.7 billion frontline workers, which is 80 percent of the world’s workforce.

Workforce: So, the book title — “The Rise of the Frontline Worker” — are you saying these employees have been overlooked and now employers are coming to understand how valuable they are?

frontline workforce
Cristian Grossmann, author of “The Rise of the Frontline Worker”

Grossmann: Early into the pandemic, frontline workers were thrust into the public spotlight. Beneath their masks, they put on a brave face and continued providing the services that society needs to sustain itself and its people. Now, frontline workers are appropriately recognized as essential workers, because they are vital to our economy. In fact, according to the Department of Homeland Security, essential workers are now officially recognized as part of our critical infrastructure operations.

When office employees transitioned to remote work, many frontline teams continued to work onsite throughout the duration of the pandemic. Without these essential workers, many companies and industries would not have been able to operate. Hospitals are filled with frontline workers, as are grocery stores, manufacturing facilities and delivery services. These are the workers that society relies on most and the pandemic highlighted just how important they are.

When it comes to workplace technology, frontline workers have been underserved for a long time. Companies typically spend most of their IT budget on desk workers while frontline employees often rely on outdated, inefficient communication channels. Paycheck stuffers, break room bulletin boards and word of mouth are just a few examples of outdated communication channels many companies still use to reach their frontline employees.

Now, with the rise of the frontline worker in the public spotlight and advances in mobile collaboration technology, business leaders are stepping up and investing more into productivity and collaboration technology that will reach and connect their frontline teams.

Workforce: It seems like an overarching theme is, by enhancing frontline workers’ access to technology, employers can gain a competitive advantage. Is that accurate?

Grossmann: I believe that digitally empowering frontline employees will be one of the single most important competitive advantages for businesses in the new post-pandemic normal. A high-performing workforce can only be cultivated when every worker is included and digitally enabled. If a company is only connecting with a small portion of their workforce and not including their frontline teams, they’re missing out on a huge opportunity to improve the safety, agility and overall productivity of their business.

Access to cutting-edge workplace technology creates a frontline workforce that is more productive, collaborative and ultimately happier. A connected workforce experiences fewer on-the-job accidents, sees higher retention rates, and is more innovative. All of these factors ultimately improve the customer experience and the bottom line of the business.

Let’s consider the hotel industry. Almost every guest interaction customers have occurs with frontline workers — they are the de facto brand ambassadors of the business. The happier these employees are and the more empowered they are to do their jobs with the right collaboration tools and access to information, the better guest experience they will create.

When companies digitize their frontline workers they are boosting productivity, safety and agility of their workforce, which fuels their competitive advantage.

Workforce: How can digitalization bring out the best in frontline workers?

Grossmann: When companies invest in their employees, it helps build a more engaged, committed workforce and lays the groundwork for a more collaborative, productive company culture.

This cultural transformation brought about through digitalization happens for a few reasons. First, simply connecting with workers and getting their input and feedback not only dramatically improves morale, but it also makes their jobs easier. The average frontline worker spends three hours each week just searching for information they need to do their jobs.

With a mobile collaboration and productivity tool, they have all the information they need at their fingertips. It streamlines operations by making their day-to-day tasks and work lives easier. They become more productive and more engaged. According to Gallup, a connected workforce leads to a 17 percent boost in productivity, 21 percent profitability increase and a 40 percent decrease in turnover.

And on a human level, just connecting workers to the company and to each other, creating space for team members to build social connections at work goes a long way in driving engagement and boosting morale.frontline worker

Workforce: Talk about the technology divide that you’ve seen between desk-based workers and frontline workers.

Grossmann: Historically, companies have invested most of their technology budget in desk-based workers while not really knowing how to connect with the frontline. It’s created a digital divide within the workplace. While desk workers have access to IT systems, email, telephones and much more, frontline workers lack the digital identity that desk-based workers are used to. It favors one group by giving them a voice while frontline workers are left without a way to contribute and connect.

Companies often resort to adapting an existing platform in their tech stack designed for desk-based workers for their frontline teams. But frontline workers have their own set of unique needs that often require different technology solutions.

Workforce: Many organizations with hourly employees still use manual, paper-based processes like scheduling and onboarding. Why should they digitize?

Grossmann: COVID-19 has accelerated the need for unified productivity and collaboration tools and the process of digitization that comes with them. If there was ever a moment to invest in frontline worker enablement, this is it. Companies are realizing just how much more efficient they are when they digitalize workflows and empower their teams with mobile technology.

First, paper-based processes are inefficient and are more likely to lead to miscommunication, which costs small companies about $460,000 a year. What’s more, completing this paperwork is repetitive and time consuming for staff. Automating routine tasks can free up employees’ time to spend on value-add tasks.

For example, if HR used a digital platform to automate the onboarding process and digitize employee paperwork, they could then spend more time on high level initiatives like recruitment and retention. This is also true of shift management. With a digital tool, creating schedules and communicating changes with employees is streamlined through one hub.

Also read: The future of automated employee scheduling

Workforce: Is HR resistant to digitization?

Grossmann: At Beekeeper, we have actually seen HR departments initiate the digital transformation journey in their own organizations. However, no matter who gets the ball rolling, it’s critical that top leadership supports and invests in digital transformation to set the tone for the project. If the CEO is passionate about progress, then frontline workers will follow their lead and support it, too.

From automating the onboarding process to digitizing payroll, HR teams can dramatically benefit from productivity tools, too. We have one customer, a casino with over 600 workers, that saved nearly $100,000 by digitizing paper-based processes, including HR forms that once had to be filled out manually.

Workforce: So, I am a manager. We’ve just digitized our employee communications through a smartphone app. And I see my employee on the floor checking their phone instead of restocking the yogurt and sour cream. How should I react?

Grossmann: I realize that letting employees use their phones at work can be a sensitive subject. Objections such as: they’re too distracting; they negatively affect productivity; they just simply “don’t belong” at work. I get it. It can be tempting to throw your hands up and banish the use of cell phones at work once and for all.

But the truth is that a “no tolerance” take on cell phone policies may not be the best solution, except for highly sterile procedures or risky production processes. In the modern day workplace, cell phones are a needed resource to facilitate internal collaboration, especially for employees who don’t have computer access or a company email account and allow them to better serve customers

I believe that the benefits of allowing employees to use phones at work greatly outweigh the risks if implemented properly. The key to successfully allowing cell phones in the workplace lies in creating a clear BYOD policy and making sure everyone understands what’s expected of them. Proactively addressing the key concerns is the first step to creating a solution that fits your company’s needs. Don’t let fear of change cause your organization to miss out on all the advantages of mobile communication in the workplace.

Workforce: You make a really interesting point about employees taking communications into their own hands by using commercial products like WhatsApp or Facebook Messenger for workplace communications. Why is that wrong?

Grossmann: Aside from security concerns, another problem with using WhatsApp for workplace communication is that it can sometimes create more confusion and chaos for workers. Juggling multiple group chats, no user management, and unprofessional user names make managing business communication through WhatsApp very difficult.

All this confusion ultimately leads to unclear, disjointed and disconnected workplace communication. In the end, WhatsApp can hurt productivity more than it helps. If managers are spending 15 minutes of each shift trying to figure out which group chat the closing checklist was sent to, then it pretty much defeats the purpose.

Don’t get me wrong. WhatsApp is fine for social communication. But when it comes to business, workers need a robust, collaborative platform with features and capabilities (like integrations) that streamline workflows and communication and enable them to be more productive.

I like to compare social media apps to the Wild West: they’re unregulated, out of control, and carry potential security consequences for a business. Companies have no control over consumer-grade communication apps.

Workforce: Communicating with your employees through an app is all well and good. But with an hourly workforce, aren’t you treading on potential wage and hour or overtime violations if they are “on” 24/7?

Having access to employees around the clock does not mean they should be accessible and available to the company 24/7. With Beekeeper, employees can set the app to the “Do Not Disturb” mode that can also be linked to their shifts automatically and mute push notifications outside of work hours. This respects the free time of off-duty frontline workers and also reduces a company’s legal risks around wage and hour labor laws that can arise when contacting employees when they’re not working.

Fair play rules are also essential when it comes to integrating workplace technology. Employees must understand that they may only use employer-provided communication technology, such as an app, during work hours.

Workforce: While we’re on that subject, talk about avoiding potential compliance violations when you digitalize employee communications.

Grossmann: On top of labor laws and data security, each industry has regulatory agencies who have specific standards and rules for companies. For example, manufacturing and construction must comply with OSHA. Health departments and the FDA have rigorous laws that govern the restaurant industry. It’s a lot for companies to keep track of and a workplace platform can help make sure they stay compliant on all levels.

Also read: Wage and hour violations cost restaurant $697,000

Another topic that must be considered when discussing employee communications compliance is privacy and how data is treated. GDPR, CCPA, and other regulations have clear guidelines on how personal data of employees must be handled. It’s crucial to have the proper certified systems in place to address this.

Workforce: You are the CEO of Beekeeper, but you’ve also spent considerable time as a frontline worker. Talk about your experiences, and how that helps you shape your company’s mission and goals.

Grossmann: Before I got into technology, I was actually a frontline worker myself. I was a factory worker, a waiter, and a chemical engineer. I started very early on learning how frontline industries work as one of my grandfathers worked in a copper factory and the other one in a paint production factory. Also, my father worked with a team of electricians and blacksmiths to produce and automate garage doors in Mexico City. I was fortunate to spend a lot of time with them learning how those businesses worked, and especially how crucial it was to have clear and simple systems in place — at that time many of their processes were all paper based! I draw on that perspective and experience to inform the ways we have been and continue to evolve and improve Beekeeper to support more frontline workers.

We serve some of the largest frontline-powered companies in the world and I also rely on what our customers want and need in a mobile productivity platform. We’re honored that companies rely on Beekeeper to support and connect their frontline workers.

From “happy birthday” to “have you clocked out?” share key updates, celebrate milestones and make everyone feel part of the team through Workforce Chat. Sign up for your demo today.

 

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Wage law implications of employer-sponsored earned wage access products

EWAP, pay, compensation, money

Nearly 40 percent of Americans struggle to cover an unexpected $400 expense, according to a 2019 report by the Federal Reserve.

Earned wage access products, or EWAPs, offer a potential solution to this problem by allowing employees to be paid in real time for the hours the employee has already worked, instead of waiting until payday to receive payment. Each EWAP employs a different system for advancing earned wages and recouping those amounts from the employer.

The majority of EWAPs require employees to download an application on their phone, through which employees can request an advance on their earned wages. The advance on the employee’s paycheck is typically paid to the employee by depositing the funds into an account or loading it onto a payroll card. This advance is then deducted from the employee’s next paycheck, along with any applicable fees.

Explaining the EWAP models

There are two distinct EWAP models: employer-sponsored and direct-to-consumer. In an employer-sponsored model, the employer directly contracts with the EWAP application provider and the EWAP application is integrated into the employer’s payroll systems. Examples of employer-sponsored EWAP applications include Instant, DailyPay and Earnin. In the direct-to-consumer model, the EWAP provider offers services directly to the employee and recoups advanced funds directly from the employee’s bank accounts after the employee gets paid.

EWAPs provide employees with greater flexibility to use their paychecks in a manner that fits their financial needs. Employees can meet unexpected expenses without resorting to overdrafts, high interest credit cards or payday loans.

By offering EWAPs as part of their benefit packages employers can help curb employee financial stress, which can lower employee absenteeism and potentially increase employee productivity and employee retention. Companies including Walmart and McDonald’s offer EWAP options to its employees.

State, federal oversight of EWAPs

Due to the nascency of EWAPs, there is little regulation at either the state or federal levels. Regardless, employers considering EWAPs as part of their benefit packages must carefully evaluate whether the EWAP implicates wage laws that an employer must comply with.

For instance, employers considering EWAPs that deposit an employee’s earned wages into an account set up by the EWAP provider could run afoul of state direct deposit laws.

Most states, such as New York and California, only permit employers to pay wages by direct deposit with the written consent of the employee. Employee authorizations allowing direct deposits of wages into an employee’s bank account may not extend to the deposit of funds into a separate EWAP provider created account. Accordingly, employers should consider obtaining additional written authorizations from employees to deposit their earned wages into an EWAP account to ensure compliance with applicable direct deposit laws.

Potential for additional fees

As an alternative to direct deposit, employers also have the option to utilize EWAPs that deposit an employee’s earned wages onto payroll cards. Employers should be wary of any transaction or loading fees imposed on an employee by the EWAP provider or the third-party payroll card issuer. This is because many states, such as California, require employees paid via a payroll card to have access to their full wages without any fees. In other states, such as Minnesota, while employers are prohibited from charging an employee any participation or loading fees to receive wages, EWAP providers may charge employees transaction fees to access their earned wages. In such circumstances, the employer should provide the employee with a written disclosure upfront stating the terms and conditions of the payroll card option, including a complete itemized list of all fees that may be deducted from the employee’s payroll card account. Alternatively, in order to avoid this potential issue altogether, employers should consider paying all such fees instead of the employee, if possible.

Most EWAP providers charge a monthly membership fee ranging from $5 to $8 a month or a per transaction fee ranging from $1.99 to $3.99 per transfer, which are either paid by the employer or the employee. These fees are typically deducted from an employee’s paycheck, along with the advanced wages. Generally, an employer may not deduct or withhold any part of an employee’s wages without employee authorization. Albeit nominal, membership and transaction fees may be considered as wage deductions. As a result, employers should consider paying any such fees on behalf of its employees, or obtain written authorization from its employees allowing EWAP providers to directly charge the employee any fees, in order to comply with wage deduction requirements.

Wage assignment laws

Moreover, EWAPs that require employers to transfer an employee’s earned wages into an account set up by the EWAP provider may also implicate assignment laws. Wage assignments are prohibited in some states and regulated to varying degrees in others. Some states require specific authorizations or significantly limit how much money an employee can assign to a third party.

In California, no more than 50 percent of the employee’s wages may be assigned at the time of the payment of wages, and the wage assignment must be notarized, and include written consent of the employee’s spouse if married. This is an important consideration for employers, as wage assignment laws vary from state to state.

As more employers offer EWAPs as part of their benefit packages, it is imperative that employers closely examine the particular EWAP’s payment structure in order to understand the benefits and legal risks of the application. At a minimum, employers should consider paying all transaction fees and obtain any relevant authorizations so as to not infringe on any state-specific wage laws.

Employers should also assess whether EWAPs implicate state and federal consumer protection, data security and privacy laws. Given that there is little current regulation on the use of such products, employers should insist on limitation of liability and indemnification clauses while negotiating contracts with EWAP providers to ensure that they will not be liable for any legal issues implicated by EWAPs in the future.

Avoid added expenses due to data entry errors and payroll oversights. Integrate your payroll system with Workforce.com’s platform for automated timesheet exports and calculations, allowing you to stay on top of your wage costs. 

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Workforce.com appoints Rod Schneider as general manager in the UK

Rod Schneider

The workforce management solutions industry is one that is constantly innovating and evolving, bringing with it both challenges and opportunities. Workforce.com is adding to its experienced, talented leadership team to capitalize on the changing needs of the global market.

The latest addition to Workforce.com’s leadership is actually a company veteran who is leaving Australia behind to take on a new challenge in Europe.

Rod Schneider was recently named general manager of Workforce.com’s office in the United Kingdom. Now based in London, Schneider, who previously was head of partnerships for Workforce.com in Australia, will oversee the company’s operations throughout Europe. With offices in France and Croatia, Schneider said he is looking forward to building relationships across the continent.

“Taking on a whole different market is very, very exciting. Some may think that it’s an odd time to make this move, but if you think about the lockdown nearing an end, it’s really forward looking. Building our external engagement is going to be a big part of what we’re trying to achieve to become more broadly known and have that broader impact here,” Schneider said.

“His success across the board in Australia, aligning with our global mission, means that Rod is fully committed and his passion and talent is just what we need in the UK as companies emerge from the pandemic,” said Tasmin Trezise, president of Workforce.com.

Schneider, who joined Workforce.com in 2016 following a career as a financial adviser, said he is eager to help companies across Europe rebuild their post-pandemic business. He will be meeting with current customers and develop new business as well. “You have good businesses that are looking to bring back their former staff, but in some cases those staff have found other jobs,” he said. “That presents a real challenge to organisations as they rebuild their businesses.”

With a keen focus on customer relationship management and an increasingly broad workforce management product portfolio that continues to expand, Schneider will work closely with the rest of the Workforce.com leadership team to prepare the organisation for the opportunities that lie ahead throughout Europe.

Workforce.com is perfectly positioned to help companies effectively restart their business, he said. “A paper roster is not going to cut it anymore. Workforce will help organisations make sure they are rostering their teams as efficiently as possible,” Schneider said. “It’s exciting to help people get their businesses back up and running.”

 A native of Toowoomba, Australia, Schneider has a master’s degree in business from the University of South Queensland. He currently lives in London with his wife.