Tag: time and attendance

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5 Tips to Simplify Overtime Calculations

Summary

  • Challenges with overtime calculations don’t just come with the math. It’s all the manual processes involved, especially with different pay conditions and compliance rules.
  • Overtime calculations can be simplified. In fact, an LA-based organization reduced time processing timesheets by 92%.
  • Payroll software can significantly reduce errors and time spent on calculating overtime.

Overtime pay calculations can feel like a full-time job, even if it’s just one of the many things that go into payroll. Different pay rates, tracking total number of hours, changing schedules, and compliance rules make it tricky, especially when you’re running an hourly team on multiple shifts. When you dig deeper into it, however, the real problem isn’t the math. It’s the manual work. 

So, how can you simplify the process, reduce errors, and ensure that employees are paid on time? Here are five practical ways to do so.

1. Improve your onboarding process

Onboarding is not just about welcoming new hires. It’s about setting up systems that make payroll, including overtime, easier to manage.

When we think of onboarding, we usually focus on getting new hires up to speed and integrated into the team. But the behind-the-scenes admin work during this stage plays a massive role in how seamless (or messy) payroll and overtime processing will be down the line.

Proper onboarding ensures accurate classification from day one. If you misclassify employees (exempt vs. non-exempt), you can face overtime compliance issues later on. This is also the perfect time to set clear expectations around overtime—when it kicks in, what overtime premium rates apply, straight time pay policies, and other relevant conditions.

Onboarding is also the time to get new hires up and running on your time-tracking system. 

Show them how to clock in and out correctly and how time logs are generated into timesheets. Getting new hires set up in your time-tracking system early prevents payroll errors later.Onboarding on its own can feel like too much admin and paperwork. Workforce.com has an automated system for getting new hires onto your system. New hires get a link to the onboarding platform and input their information, minimizing errors and admin work for your team. You can also upload contracts, handbooks, and other key documents, plus create employee profiles with base pay and classifications.

2. Automate time and attendance tracking

Employee work hours are at the core of processing payroll and calculating overtime pay. Manually processing timesheets and payroll is not only time-consuming but also increases the risk of payroll errors, underpayments, and compliance issues. 

An automated time and attendance system ensures all hours of work are recorded accurately, so you don’t have to second-guess overtime calculations. Workforce.com captures time logs through a tablet placed on your job site or directly from an employee’s mobile phone. The system logs location data, which is essential if you manage teams in different locations. 

Clock ins and outs are generated into timesheets, indicating the total number of hours. Overtime hours are flagged, and managers can quickly review and approve in seconds and fix any discrepancies before payroll processing. 

For Lisa Hanna, business manager at Ethos Orthodontics, payroll used to be a three-day ordeal. “Generally, I’d spend a few hours each Sunday printing out and processing timesheets to get them ready for payroll that week,” she shared.

With Workforce.com, Hanna got her Sundays back as the system prepared the timesheets for her. It now only takes a few clicks to approve and export timesheets for payroll, reducing the admin load and compliance risks.

3. Set overtime alerts

Overtime is sometimes necessary, but it shouldn’t be eating into your budget unless it absolutely needs to. 

Workforce.com keeps overtime under control with real-time visibility. When scheduling, managers get an alert when an employee is scheduled for more than their regular hours. If it’s intentional, great—no surprises on payday. But if it’s an accident? You can fix it before it turns into an unnecessary payroll expense.

The system also flags when employee hours are about to hit overtime. If someone’s shift is over but they’re still clocked in, managers get notified. At that point, they can check in: Did the employee forget to clock out? Are they actually working? If so, is overtime work truly needed, or can the task wait until the next shift?

These real-time alerts prevent unplanned overtime, keep labor costs in check, and even promote better work-life balance for your team.

4. Use payroll software

Payroll software can simplify overtime calculations, but only if it’s built to handle the complexities of your workforce. 

Consider your payroll needs and go for the solution that meets your requirements. Whether you’re looking for software or planning to switch to a different system, consider the following: 

  • Overtime and labor laws – Can it keep up with changing labor laws? Does it account for both federal and state overtime rules? Can it automatically update tax rates?
  • Integration and data entry – Does it sync well with time tracking and HR? Can data flow smoothly from one module to the next, or will you be stuck with manual entry?
  • Customization – Aside from employee’s regular rate, can it handle shift differentials, different rates, fluctuating workweeks, non-discretionary bonuses, weighted average calculations, and other conditions and exemptions?
  • Ease of use and implementation – How long does it take to roll out? Can employees actually use it without a steep learning curve? Even the most advanced features are useless if your team avoids the system. 

Mikhuna, an LA-based food truck business, teamed up with Workforce.com to simplify payroll processing, time and attendance tracking, and employee scheduling. Because everything is now done on a single platform, they saw a 92% decrease in time spent correcting timesheets and saved three hours on payroll processing.

“It used to take me between two to three hours to run payroll,” Cynthia Carreiro, Mikhuna’s CFO, shared. “Now it takes no more than 3 minutes.” 

Beyond saving time, Mikhuna also gained real-time visibility into labor costs. “A year from now, I’ll be able to look back at a pay run from the same time last year and see if I’m losing or making money,” Carreiro adds.

When payroll software is built right, it doesn’t just save time. It gives you the insights you need to make smarter business decisions.

5. Understand overtime rules that apply to your workforce

Even with the best payroll software, your managers and HR team still need a firm grasp of how overtime rules work not only for processing payroll but also for answering employee faqs. 

At the very least, managers should know existing federal laws and state rules around overtime. Under the Fair Labor Standards Act (FLSA) rules, nonexempt employees must receive overtime pay for hours worked in excess of 40 in a workweek at one and a half times their regular rate of pay. But here’s the kicker—what actually makes an employee exempt or nonexempt? The Department of Labor set the guidelines on what makes an employee exempt or non-exempt to overtime pay. While hourly employees are typically non-exempt, salaried employees may also be entitled to overtime if they meet the criteria on salary levels and job duties.

What about regular rate of pay calculations? What goes into in exactly? Aside from regular hourly rate, salaries (for salaried, nonexempt employees), nondiscretionary bonuses, shift differentials, piece-rate pay, and commission must be included in the computation.

Leadership teams should be able to provide a clear, high-level explanation on these areas, especially when they concern employees’ total compensation.

Also read: Exempt vs. non-exempt employees: knowing the difference

If you operate in a state with stricter overtime laws, that’s another layer of compliance to manage. Take California, for example. Daily overtime is recognized in California, which means that workers are entitled to overtime payments when they work more than 8 hours in a single workday or over 40 hours in a single workweek. This is different from FLSA rules, which calculate total overtime based on hours worked in a 40-hour workweek rather than a single workday

The overtime pay rate also varies in California. Employers must pay one and a half times the regular rate of pay after 8 hours a day. But double time or twice the regular rate of pay takes effect for employees who work after 12 hours a day or after 8 hours on the seventh consecutive workday.

Also read: California Overtime Laws Explained: What Employers Need to Know

Payroll software can handle the calculations for you according to applicable federal and state laws. However, your team still needs to understand the rules, both to ensure your systems are running correctly and to confidently handle employee questions.

Stop Working Overtime to Calculate Overtime

Calculating overtime wages shouldn’t steal your weekends or keep you at the office late. With the right system, you can automate not just the math but also streamline its administrative side.

Workforce.com automatically calculates overtime, no matter how complex your pay setup is. Whether you have shift differentials, double time, fluctuating workweeks, or non-discretionary bonuses, the system handles it all.

It also keeps up with labor laws to ensure compliance at every step. Need to update an employee’s pay rate or adjust your overtime policy? Just enter it once, and the system updates everything—from time tracking to payroll—without extra work on your end.

Overtime shouldn’t be an admin nightmare. See how Workforce.com makes it simple for businesses worldwide. Check out our customer stories or book a demo today. 

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5 sneaky ways employees commit time theft (how to stop it)

Summary

  • Time theft is what happens when an employer unknowingly pays an employee for time they didn’t work while on the clock. 

  • Examples of time theft include falsifying time cards, buddy punching, unauthorized or extended breaks, excessive social media use, and personal activities on company time. – More

  • You can deal with time theft by implementing HR policies and utilizing automated time and attendance software. – More

If you discovered that one of your employees was stealing money or equipment from the company, you’d likely reprimand or even terminate them. What you may not realize is that another type of theft is likely happening right under your nose — time theft. 

Software Advice surveyed shift workers and found that 43% of hourly workers admitted to over-reporting the number of hours they actually worked during their workday. This type of employee theft can result in big losses for your organization. If every employee over-reported just 30 minutes of work every day, this could result in thousands of dollars lost to time theft every month.    

To tackle the issue of time theft, you must first understand how your employees could be stealing time in the first place. You should implement a time and attendance policy that clearly states the organization’s stance on time theft, the expectations of the staff, and the repercussions for breaking these policies.

Beyond this, you should consider where your manual time tracking processes are most vulnerable to abuse and seek ways to increase automation across your workforce. 

How to stop time theft for good

What is employee time theft?

Employee time theft occurs when an employer unknowingly pays an employee for time they didn’t work while on the clock. 

It’s primarily applicable to hourly employees more so than exempt employees. If left unchecked, employee time theft costs can eat away at your monthly wage cost budget very quickly. 

One of the more egregious cases of employee time theft involved a US Postal Service employee in Washington, D.C., who received $31,000 in wages for jury service that the employee claimed lasted 144 days. The theft investigation revealed that the employee had actually been discharged from jury duty but forged court papers to persuade his employer to pay him for what turned out to be a very long vacation.

Your time theft problem might not be as bold as the US Postal Service’s. Smaller, everyday occurrences of time theft are more difficult to spot but still negatively affect your organization’s bottom line and employee productivity. 

1. Falsifying time cards

The falsification of a time card occurs when an employee provides inaccurate data about their working hours or causes others to provide misleading information. This typically occurs with manual timekeeping systems or tracking employee hours with a time clock.

For example, say an employee only works 30 hours in a week but claims 40 hours of work time on their timesheet. Or deceitfully claims to have worked an entire shift, such as at the end of 2022, when a Polk County firefighter was arrested for falsifying his time cards. He had received a total of $1,265.04 for three 24-hour shifts he did not work.  

Solution — use automated time tracking software.

Paper timesheets are the simplest way for employees to steal time, and physical time clocks allow for multiple excuses: “So-and-so lost their time card, so I loaned them mine,” or “I lost my swipe card.” With time clock software, you can prevent fraudulent time theft and early clock-ins and prompt employees to clock back in via mobile apps when their breaks are over.

A mobile tracker app also empowers managers to follow employees in real-time from anywhere and continue tracking when an employee clocks in. Workforce.com’s mobile time clock app helps you manage employees’ time and administer digital timesheets, payroll, budgeting, and labor compliance reporting. 

You also can track remote employees’ locations via their GPS clock-in. These tools work everywhere and show you their exact location at a glance. You can restrict their clocking in or out at your job site or see where an employee who always has an excuse for being late is actually spending their time.

2. Buddy punching

Another form of time theft is when an employee clocks in or out for a coworker. This is often referred to as buddy punching. Companies that operate using rudimentary procedures around clocking in are at higher risk of having their employees cheat the system in such a way.  

Solution — automate clock-in and clock-out procedures.

Time and attendance software like Workforce.com makes buddy punching virtually impossible. Employees automatically punch in and out through their smartphones using photo identification and passcodes – this ensures that the right person has clocked in for the right shift. 

3. Unauthorized or extended breaks

Employees deserve their break time — breaks are required by law in some states. But there is room for abuse. Employees could easily extend their lunch break time by a few minutes on a regular basis. Excessive cigarette breaks are also often flagged as a cause for concern. In light of the time used up on smoke breaks, one UK-based company even awarded its non-smoking employees four extra days of time off.

Solution — build a healthy break culture that is effectively managed through scheduling and tracking solutions.

Taking lunch breaks from time to time is important for employee engagement and productivity. So, regulating your team’s break activities shouldn’t be done in a way that puts them off from taking theirs altogether. Create a healthy break culture within your team by doing things like: 

  • Encouraging staff to actually take their breaks
  • Having management take breaks themselves and lead by example
  • Providing pleasant spaces for your employees to take their breaks in
  • Offering catered lunches

Furthermore, Workforce.com’s scheduling solution automatically allocates rest breaks that are compliant with state law. This information is also readily available for employees through their employee app. 

This way, your employees get the rest they need without taking longer breaks that ultimately constitute time theft. 

4. Excessive social media usage

Social media use on the clock is inevitable. When it happens consistently, it can be considered a type of time theft. One study by Desktime found that of the time employees spend on non-work-related websites, nearly 50% of that time is on social media. 

From the time spent on work-unrelated websites, social media takes up 49.1%. 

Solution — incorporate clear guidelines about social media use into your company policy.

Employees using social media and checking their phones while at work is inevitable, to some extent, and attempting to cut it out altogether will likely cause resentment. Instead, develop clear policies on acceptable social media use in the work environment. Your policy could include information on:

  • The distinction between social media use for work purposes (if applicable) and for personal use
  • Times and places for personal social media use; for example, employees can only use it during their break times and not in the work area
  • Policies around posting photos or videos on company property and/or wearing company uniforms

5. Personal activities on company time

You may experience employees who have no problem carrying out personal tasks while on the clock. This could include taking personal calls, online shopping, running errands, or even running their side business. Excessive socializing between coworkers could also be considered time theft.

Solution — create a great sense of ownership and accountability amongst your team. 

There are a number of ways employees can avoid working and take personal time during their work shifts. Turning your workplace into a police state is one way to handle the problem, but it would negatively impact your team’s morale. 

Alternatively, you should strive to create a work environment that prioritizes and harnesses employee satisfaction. When employees care, their loyalty and productivity increase. Implement a system of employee rewards and recognition. Grant time off — or add in an extra shift — for shift workers who excel in their roles. Creating a culture of honesty, transparency, and trust helps prevent time theft.

It is important to communicate with your team to understand what needs to be done to help boost employee morale. 

As Tom Smith, co-founder of Partners in Leadership and three-time New York Times bestselling author, once said, “An attitude of accountability lies at the core of any effort to improve quality, satisfy customers, empower people, build teams, create new products, maximize effectiveness, and get results.” 

Dealing with employees who have committed time theft

Dealing with employees who have been caught buddy punching, taking longer breaks than allowed, or committing any other type of time theft can be tricky. Your first instinct might be to refuse to pay that employee for the time they have stolen, but this can prove to be more costly down the line. 

If you refuse to pay for the hours worked because you think they were falsely reported, you could be drawn into a costly wage-and-hour lawsuit for back pay.

And, if you respond to the lawsuit with a claim of employee time theft, it could be considered retaliation against the employee. Be sure you have a reasonable basis for filing the claim to avoid retaliation.

You are much more susceptible to wage-and-hour and overtime lawsuits with lax time and attendance policies or unsophisticated timekeeping practices. Business owners are turning to automated time-tracking solutions to monitor employee hours.

Create time and attendance policies

It is important to establish clear and specific time and attendance policies and ensure that they are communicated well to your staff. If your team isn’t aware of what is expected from them when it comes to attendance and time theft, how can they abide by your rules?

Ensure your team knows why you are implementing the policies and what is expected of them.

The first thing to do is consult with your employment law attorney regarding local, state, and federal time-theft regulations. An employer can work with you to develop clear, consistent policies regarding clocking in and out procedures, break periods, and cell phone and social media use while clocked-in. It’s crucial that employees fully understand their work-related responsibilities and know what they should be doing when there are lulls in the workday.

Immediately incorporate these policies into your employee handbook. All hourly and salaried employees must review and sign a document stating they have read and understand the policies in the handbook. Also, post reminder signs in high-traffic areas and send alerts through mobile apps so employees can see them. 

Follow through on procedures and disciplinary actions

You don’t want to punish employees. It’s costly and emotionally draining for all involved, and it can suck the morale out of a workplace. But you need preventative measures in place should you discover evidence of time theft. 

Develop and communicate in your handbook the disciplinary procedures to deal with time theft. This may include a program in which you initially issue a verbal warning followed by a written warning or establishing a performance improvement plan that’s ultimately followed by suspension and concluding in termination. 

If it reaches that point, Findlaw.com states that if an employee is suspected of stealing time, it’s up to you to conduct a fair, accurate investigation. Someone other than the person who discovered the theft of time should investigate it, strict confidentiality must be maintained, and you should enlist expert help from a CPA, an attorney, or other relevant professionals.

Compliance with wage-and-hour laws is a headache and difficult to track. Constantly turning to a labor law attorney gets expensive quickly. The laws, regulations, and ordinances can be overwhelming, and a wrongful termination suit is costly. Workforce.com’s compliance platform ensures simplified and automated compliance with federal, state, and local labor regulations.

Stay on top of time theft with Workforce.com

Time theft doesn’t have to be a cost of doing business. It’s challenging to deal with time theft and recoup losses, but Workforce.com has the systems and processes that empower you to prevent time-theft losses from ever occurring again.

Here are a few practical ways Workforce.com helps you crack down on time theft:

Geofencing

Geofencing technology allows you to limit the radius in which employees can use their mobile time clock to punch in for work. This means they always have to be physically present at work to clock in, preventing them from clocking in at home while running late.

Photo identified clock-ins

With Workforce.com’s time clock, staff take a quick selfie every time they clock in for a shift. These photos accompany every timesheet, helping managers confirm employees are who they say they are when clocking in. Photo identification like this prevents buddy punching, a common form of time theft.

Time clock passcodes

If you opt to use a single tablet as a time clock for all staff members, Workforce.com assigns everyone unique passcodes. Employees use these passcodes to securely clock in and out of work without anyone else doing it for them.

Meal and rest break clock outs

You can automatically apply lunch breaks to every shift you create in Workforce.com. If an employee has a break scheduled, they must physically clock-out and then clock back in once their break is complete. This break time is then recorded on their time sheet. Having a specific break button like this ensures an employee never takes unauthorized extended breaks.

Real-time solutions like Workforce.com’s time and attendance system prevent time theft and streamline the payroll process. Automated solutions also provide your managers with a worry-free system so they can focus on running a business and not hovering over a time clock. But don’t take our word for it. Check out the free webinar below, where Forrester Research dissects the ROI businesses can expect from time and attendance platforms: 

Webinar: Building a Business Case for WFM

Build your culture, track employee hours, and crack down on time thieves with Workforce.com’s time and attendance software. Start a free trial today.

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10 employee timekeeping & tracking best practices

Summary

  • Using a software solution to improve your time-tracking is a great way to ensure you’re recording time and attendance data regularly and accurately. 

  • Following our time-tracking best practices helps you identify problematic patterns that lead to employee lateness.

  • Understanding the extent and causes of lateness inside your company will allow you to implement changes that will help reduce tardiness altogether.

Your employees turning up late to work from time to time is normal and to be expected, to a certain extent. The problem is when patterns of habitual tardiness start to emerge. 

The most obvious issue with employee tardiness is the added costs to your business. An employee who is 10 minutes late every workday will have taken the same amount of time as one week’s paid vacation by the end of the year. 

Besides the cost, employee lateness and absenteeism can negatively affect productivity, which trickles down to your customers and can tarnish your company’s brand image. Tardiness can also mean more pressure if work is shifted onto other team members, leading to burnout and low morale. 

Accurate employee time-tracking and consistent recordkeeping help you identify the patterns and causes of employee lateness. Business owners often turn to time-tracking software to do this and to prevent tardiness from getting out of control.  

Here are 10 employee timekeeping best practices you can use to encourage timeliness and efficiency at your business.

1. Keep precise records

Accurate time and attendance data is the foundation of any timekeeping initiative. Without knowing exactly who is on time, who’s late, how often they’re late, and by how much, fixing the problem feels like working in the dark. Having access to this data in real time makes employee time tracking easy.

Use time and attendance software to put this informational bedrock in place from the start. Once you know that you are accurately recording attendance data in a usable form, you’ve made any new timekeeping initiative much easier to manage.

2. Track data regularly

Manual entry timekeeping systems are prone to errors, yet so many small businesses still rely on spreadsheets for tracking employee hours. The longer you leave gaps in the data, the greater the chance that employees will forget what time they arrived or left.

If your company is still using manual timecards and employee timesheets, you should be collating that data daily, when possible, or weekly at the very least. Don’t get complacent if you’ve swapped manual methods for a software system. Be sure to generate attendance reports at a similar cadence, at least once a week. The sooner you spot a problem, the more quickly you can address it.

3. Spot problematic patterns

Consistent data tracking helps you spot the problematic patterns holding your business back.

Once you have your regular cycle of time and attendance data in place, take a holistic view of what it is showing you about your business over time. Look for deeper recurring patterns related to particular shifts, managers, or locations. There may be a simple fix for hotspots of poor timekeeping methods, but if you don’t know a hotspot exists, you’ll never be able to address it.

Webinar: The Best Way to Replace Call-Outs

4. Have a clear point of contact

A clear management hierarchy means there’s no confusion over attendance issue reporting.

Make someone responsible for time management and maintaining accurate timesheets. This could either be on a per-shift basis or per location or department. Make it clear their role isn’t simply to punish late arrivals but to work with employees to resolve issues that might be affecting their attendance.

5. Use a point system

More companies are switching to point-based systems to track and penalize employee tardiness. These attendance point systems work by automatically assigning staff points for various infractions such as clocking in late, leaving early, or never showing up. HR can use these point records to build a case and take appropriate action against repeat offenders. 

This kind of system is perhaps the most practical way of dealing with lateness. Since points are automatically accumulated for showing up late, employees are much more likely to be incentivized to be on time to avoid verbal and written warnings. 

Webinar: Points-Based Attendance

6. Normalize healthy working hours

If staff are constantly expected to work late, they’ll be tempted to claw the number of hours or minutes back from somewhere else.

This is the flip side of making sure everyone arrives promptly. Show staff they’re expected to leave on time as well as arrive on schedule while still encouraging those who actually want overtime hours.

The WHO recently released estimates of a 29% increase in deaths from heart disease and stroke brought on by long working hours. Even if those figures are off, the days when people would tolerate overwork are on the way out. Be ahead of the curve in this area, and staff will notice.

7. Introduce and automate break times

Offering breaks means staff have fewer reasons to be late in the first place.

Breaks and paid meal periods are not required by labor laws in the US, but they benefit employees and employers alike. Staff who take lunch breaks are more productive, loyal, and engaged.

Research shows that one in 10 employees never break for lunch, and nearly half just eat at their desks three or more times a week. If managers are seen taking their lunch break away from their desks or workstations, that gives employees permission to do the same. An effective employee scheduling system should allow you to automate these breaks into the daily workflow, sending staff reminders when it’s their break time. These reminders encourage staff to actually take their breaks, unlike in non-automated systems where properly timed breaks can often go overlooked.

If staff feel the company values their time, they’ll value the time they give to the company. When they know they’ll have an opportunity during the day to make that important personal phone call or just grab a sandwich, there’s less reason for them to cram those things in before work, which makes them late.

8. Use predictive scheduling

Often lateness occurs because people are trying to accommodate their lives around erratic working hours.

Predictive scheduling is already legally required in some states, but it’s worth considering, even if it’s not mandatory. Setting schedules two weeks in advance gives employees time to plan. By reducing the number of frantic child-minding emergencies and other last-minute problems, you reduce the reasons for people to arrive late to work.

Webinar: How to Optimize Your Staff Schedules

9. Lead by example

Creating a company culture in which timekeeping is valued starts from the top.

Hold yourself, managers, and even executives to the same standards as other staff. Make it clear that being diligent with work time is expected of everybody. If management rolls in at 9:30 am several times a week, don’t be surprised if staff start to view prompt attendance as a moving target and follow suit.

10. Set and reward goals

Rewarding staff for being at work can be seen as a false economy, essentially paying them twice for doing what they are already contracted to do. That doesn’t mean there aren’t ways to incentivize good attendance.

Applying bonuses to teams rather than individuals helps boost morale while maximizing engagement and attendance. Rewards don’t need to be financial in nature. If employees maintain punctual time reports by the end of the week, give them an early finish on Friday. You could even show appreciation through something simple like praise in the company newsletter or being given control of the workplace Spotify for an afternoon.

Identify and address lateness before you have an absenteeism problem

Proper attendance tracking is about more than just reprimanding people for being late. Patterns of poor punctuality are a warning. Addressing them is a health check of your company’s staff engagement and an opportunity to create a happier, more productive working environment.

Use attendance tools like Workforce.com to fully integrate these ideas into your business.

If you find your employee tardiness problem is morphing into a more severe absenteeism problem, it may be time to take additional measures. Watch our webinar on absenteeism below featuring Anne Laguzza, CEO of The Works Consulting. 

Webinar: How to Reduce Absenteeism

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What is Earned Wage Access (EWA)? A Few Considerations

An astronaut husky holding an iiphone with money raining down

Summary

  • Earned wage access (EWA) programs are an increasingly popular way for employees to access their earned wages before their next scheduled payday.
  • Implementing an EWA program helps employers attract and retain top talent and reduces employee absenteeism. 
  • Before implementing an EWA program, ensure that any direct deposit arrangements are compliant with your state laws and consider the associated charges for using an EWA service.

In a bid to improve employee retention in the current landscape, employers are turning to advancements in payment technology and alternative payroll processes. One solution that is gaining momentum is earned wage access (EWA), also known as on-demand pay. 

Earned wage access programs allow employees early access to parts of their salaries before their scheduled pay period. Unlike payday loans and advances, EWA solutions only grant employees access to money that they have already earned.  

Initially a concept that gained popularity in the gig economy, EWA programs have now drawn the attention of employers and employees across all industries. Research shows that access to EWA has become a priority for job seekers around the country. 

From small businesses to large corporations, there are a number of things to consider before adding EWA as an employee benefit to your retention strategy. Employers must understand the different EWA models out there as well as the common features across EWA providers, integrating it into their payroll system and remaining in line with any regulatory requirements. 

The two types of EWA models

Earned wage access products generally require employees to download a mobile app that they will later use to gain on-demand access to their salaries. These advances are paid directly into the employees’ account or to a dedicated pay card. EWA products function in one of two ways.

  • Employer-sponsored – In these cases, the employer contracts an EWA service provider and integrates it directly into their own payroll system using an API. In these models, the employer pays a flat rate for the use of the service.
  • Direct-to-consumer – Here, an agreement is set up directly between the employee and the EWA provider. The employee receives funds directly into their account and is charged a transaction fee each time a withdrawal is made. 

The 4 main features of an EWA service 

Although there are differences between earned wage access services, there are four core features that are common in any solution out there.

  1. The funding of EWA – The capital for granting employees access to their funds usually comes directly from the EWA provider. The service provider pays through their own available funds or through a debt facility. The service provider verifies that the funds are, in fact, available through an integration with the employer’s payroll provider.
  2. Disbursement methods – There are various ways that funds are distributed to employees: Direct deposit, a pre-allocated bank account that the employee sets up through the EWA provider, or a prepaid card.
  3. Method of payment collection by EWA provider – The vendor is usually repaid directly from the upcoming pay cycle.
  4. The time it takes a payment to reach the employee – This varies depending on the method used:
    • Direct deposit – the next business day
    • Prepaid or debit cards – takes up to 48 hours
    • Bank transfers – instant but can carry a fee
    • EWA vendor-provided bank accounts – free and instant  

Benefits of earned wage access for employees

Earned wage access has gained popularity with employees over the last few years as a great way to ease the financial stress of trying to survive between paychecks. Rising inflation over the past few years continues to worsen as experts believe that we are hurtling toward a cost of living crisis. Forty-one percent of employees have received pay raises this year. Of these, only 28% claim to have received a raise higher than the current inflation rate. 

 

Webinar: How to Navigate the Inflation Crisis

 

One study found that the reasons for utilizing EWA varied between employees from different age groups. Gen Z workers tend to use it to pay for everyday expenses like groceries or make loan or rent payments. It reduces the stress of not having the cash flow available until the next payday. 

Millennials also used EWA to cover family-related expenses, bills, and unexpected expenses related to vehicle maintenance. Gen X and boomers rely on EWA for family expenses, bills, and groceries but also use it to cover any emergency medical expenses. Either way, EWA has broad appeal across all age groups. 

The COVID-19 pandemic and the uncertainty that followed meant that more people started to prioritize building up a financial safety net. Earned wage access makes this easier to do. Unlike payday loans and advances, employees are less likely to accumulate debt from high-interest rates and overdraft fees. 

Benefits of earned wage access for employers

Signing up for an EWA program means more work for your human resources team, but the benefits of offering your employees more flexible access to their paychecks could outweigh the effort required.

Employees continue to struggle with inflation and trying to keep up with the high costs of living. Research shows that 78% of employees are seeking alternative employment in hopes of achieving better financial well-being.

 

Webinar: How to Stop Employee Turnover

 

By offering your staff the option of EWA and contributing to their financial wellness, you are more likely to attract top talent. In fact, 76% of employees agree that it is important for employers to offer EWA. Besides attracting talent, looking out for your staff’s financial health through EWA helps you improve your employee retention. 

A lack of financial well-being is a major cause of stress for many employees. Furthermore, stress is the third-leading cause of long-term workplace absence and the fourth cause of short-term absence. Improving this situation means your employees will also be more present at work. 

What to consider before implementing an EWA program

When looking at integrating an EWA program into your company, there are two things to consider: the associated fees for you or your employees and the legal implications of doing so based on where you are based. 

It is important to understand your state’s direct deposit laws. Some states only allow employers to pay via direct deposit when the employee gives their consent through a written agreement. If the EWA program you have signed up for requires a separate bank account to be set up, this might not be applicable within that agreement. You may need to obtain additional written authorization to ensure compliance with laws and regulations.

The charges associated with EWA programs vary from one provider to another. Some involve charging employers a flat fee, while others charge employees per transaction. Before contracting an EWA service provider, you need to budget for any charges you will absorb or analyze whether or not your staff are willing to pay transaction fees themselves. 

A successful EWA program begins with accurate timekeeping 

If you are going to offer EWA, you need to ensure that the wages employees have access to are accurate as soon as they are recorded. After all, fixing pay errors is much harder when employees have already spent their money. With automated time and attendance software, you can record accurate timesheets in real-time before they even reach your payroll or EWA system. This way, you can give your employees immediate access to their funds with peace of mind.

Workforce.com’s time and attendance is also synced with an employee scheduling system, meaning you can see wage and hour variances in real-time and on timesheets. With this visibility, you’ll be able to immediately catch where and when an employee’s pay doesn’t match up to their scheduled hours.

To find out more about how to lock in accurate wages BEFORE employees get access to them, check out our whitepaper on timekeeping below, or get in touch with us today.

The Practical Guide to Time and Attendance

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Preventing employee time theft in restaurants

Summary

  • Employee time theft is when employees are paid for work they did not do

  • Employee time theft can come in various forms

  • Restaurant managers can prevent time theft with workforce management software

As a manager of a restaurant, when you think of employee theft in the workplace your mind may automatically go to blatant examples, such as staff stealing equipment, cash from the register, or even snacking on supplies. However, there’s a less blatant form of workplace theft: employee time theft.

While employee time theft is not always easy to spot, the impact is. Employee time theft directly impacts labor costs, and sadly, it’s not uncommon. Time theft can be prevented by investing in innovative time tracking software that ensures maximum employee productivity at all times.

What is time theft?

Time theft is when an employee is paid for time they didn’t work. It typically applies to hourly employees rather than exempt employees. Therefore, as a restaurant manager, you are at a high risk of being a victim of employee time theft.

What does the law say about time theft?

Unfortunately for employers, there are no explicit federal time theft laws, which puts businesses in a vulnerable position. While there are ways some businesses may be able to recoup losses through a civil suit, there is no guarantee this will be successful. So, employers need to make sure they’re doing everything they can to prevent time theft in the work environment.

Recognizing time theft in restaurants

There are different forms of time theft. Here are the major ones to look out for:

  • Falsifying timesheets: This is when employees misrepresent work hours. For example, an employee only worked 30 hours in a week, but they doctor their timesheet and say they worked 45 hours. If your restaurant uses temporary staff from staffing agencies, this is something to watch out for. A restaurant in Florida found it had $10,000 added to its payroll costs when a temp agency worker fraudulently misrepresented his work hours.
  • Buddy punching: This is when an employee clocks in and out for a coworker. If an employee is running a few minutes late and doesn’t want this to be recorded, they may ask a coworker (who’s already in the restaurant) to clock in. The reverse can also be true, employees can leave their shift earlier than scheduled, but have their buddy clock out for them.
  • Extended breaks: Employees may take too long on lunch breaks or go for unauthorized breaks like smoke breaks. This is likely to happen where there’s easy access to a back door.
  • Doing personal tasks during the workday: Instead of clearing tables, wait staff are surfing social media on company time or sneaking off to the restroom to take personal calls. A 2020 Digital Distraction & Workplace Safety survey revealed that the average employee spends 2.5 hours each workday looking at digital content that is unrelated to their job.

Uncovering time theft in your restaurant

While time theft can be difficult to prove, here are a few pointers that you may realize at your workplace:

 How to prevent time theft

Prevent time theft by using innovative scheduling and timekeeping software that ensures there’s no lost productivity from employees.

Use accurate scheduling software

According to the Fair Labor Standards Act (FLSA), employers must pay staff according to what’s recorded on the timesheet. Therefore, it’s important that your scheduling software creates the right shifts in the first place. Moreover, all schedules should properly align with hours reflected on timesheets, as this will prevent paying employees for hours they didn’t work.

Use an automated time clock solution

Eliminate the risk of falsifying time cards with a time clock app. Here’s how it works:

    • Staff clock in and out in an app with their personal IOS and Android devices.
    • Managers can guarantee the right worker is in the right shift, at the right place, at the right time with unique clock in/out passcodes, electronic photo verification, and GPS location data. This will directly eliminate buddy punching.
    • All clock-in data is automatically recorded, and the app generates electronic timesheets — the perfect solution for business owners who are tired of using stacks of binders full of paper timesheets.

Give your managers the ability to manage operations during the day

Provide your managers with a time and attendance system that stays on top of employee productivity. Managers should be able to monitor employees remotely — all from a computer or mobile device. This kind of monitoring should take the form of a live timeclock feed and tardiness notifications.

Managers should also receive notifications when employees clock in and clock out for breaks. With these instant notifications, it’s possible to cross-reference clocking in and out with the shift schedule to make sure there are no discrepancies in break times. Giving managers the ability to manage operations during the day ensures they can easily spot time theft.

Create and enforce firm time and attendance policies

Create attendance policies and communicate them clearly to your staff. Your staff might be unaware of their actions and how they can be perceived as time theft, so it’s important they know what time theft is and how they may be breaking company policy.

Make sure time and attendance policies include clocking in and out procedures, break periods, and cell phone and social media usage when on the clock. It’s crucial that employees know what time theft is and understand that it will not be tolerated. If necessary, make sure policies are enforced with disciplinary actions, as they may act as a deterrent.

Provide an enjoyable work environment

Burnout, low pay, and minimal benefits may make employees more likely to commit time theft. Employers should provide staff with enjoyable working environments where they feel valued, taken care of, and respected – this always helps reduce time theft. Consider implementing something like an employee reward system to create a culture of positivity and motivation. You could also regularly grant time off — or add in an extra shift — for workers who excel in their roles.

Prevention is better than a cure

While you can’t go back in time to stop prior time theft, you can certainly take steps to prevent it from continuing. Use automated workforce management software to empower employees to make the most of the hours they’re scheduled for. Contact us today to learn how you can get started.

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The four essential elements your time clock system should offer

When as many as 38% of employees admit to turning up late to work at least once a month, it’s clear that a time clock system that accurately tracks when staff start and finish their working day isn’t something companies can afford to overlook. Research has found that the accumulated minutes lost to tardy workers costs $1 billion a year in California alone.

If you’re considering implementing time clock software at your business, or if you’re one of the 38% of companies still relying on physical time cards and feel it’s time to upgrade, this checklist of features will ensure you choose a time clock system suitable for the modern labor market.

Electronic records for easier data handling

Verifying when employees start and finish their working day is only the start of what time and attendance data can do. This information is at the heart of your HR processes, so you need a time clock that integrates with other departments and systems, from payroll to tax compliance.

This is where the companies still relying on older time clock systems are really losing out. Not only does copying across time and attendance data into payroll or accountancy software add unnecessary hours of work, but it also adds the risk of payroll discrepancies, which can in turn lead to costly legal exposure. The Department of Labor raised more than 24,700 back pay compliance actions in 2021, totaling $230m in underpaid wages.

Using specialist time and attendance software to collate and update your data automatically as employees arrive and leave means more robust labor compliance. It also provides the ability to integrate that data over time, generating internal reports on productivity and efficiency to guide your future business decisions.

Automatic verification for efficient clocking in and out

Shift-based businesses don’t just lose out when workers are late. Managing shift changes as smoothly as possible is also vital, and a time clock system that creates bottlenecks as staff wait to clock in and out adds to your problems rather than solves them. If managers also have to spend time transcribing attendance data or double-checking timesheets, then you’re losing valuable hours every day at all levels of your business.

Once again, manual time clock systems that use punch cards or paper timesheets will struggle in this area. Even electronic code entry systems or key cards can slow down your workflow, as employees spend time pushing buttons or digging in their pockets and bags for whatever they need to satisfy the time-entry requirements.

When speed is of the essence, the latest biometric time clock systems have a clear advantage. Employees only need a thumbprint or to face a camera, and they’re ready to work. Managers benefit, too, with time and attendance data that’s accurate and ready to use as soon as staff is through the door. Mobile apps can speed the process up even more, allowing staff to clock in using their own phone as they arrive.

Manager oversight for company peace of mind

Trust is vital to the viability of any company. Research has shown that employees who feel their employer trusts them are 50% more productive and 76% more engaged in their work. The best time clock systems are therefore unobtrusive for staff and still give managers visibility and authority over time and attendance issues.

Manual time clock systems that rely on self-reporting arguably skew this dynamic in favor of staff, giving managers no reliable way to verify the data. The practice of “buddy punching,” in which staff clock in for absent colleagues, is a typical weakness of this sort of time clock system.

Biometrics swing the pendulum in the opposite direction, using staff’s biological data — fingerprints, retinal scans, facial recognition — to prove they are where they say they are when they claim. It’s airtight from a management perspective but unpopular with employees. A survey found that 69% of the public is uneasy with the use of biometrics.

Time clock systems that utilize mobile apps offer a great compromise. Employees clock in using GPS and sometimes a selfie on the premises, which their manager then checks against their schedule before approving the clock in or out time. This system also gets around some concerns regarding biometrics, as the selfie is approved manually rather than storing the data in a database or feeding it through a third-party biometric algorithm.

Many automatic time clock systems also display cost variances for shifts, showing money saved or lost if there is a difference between an employee’s scheduled time and the actual time they work. Offering oversight into labor costs at a granular level is one of the main benefits of a precise time clock system.

Precise entry tracking for spotless payroll

This one may seem obvious, and you might think every time clock system being used today would be able to correctly log the exact time workers arrive and leave, but anything that relies on employees or managers manually recording hours worked is prone to inaccuracy.

As many as 80% of U.S. employers report having to fix mistakes in manually submitted timesheets, as staff forget to clock in or out or because errors creep in as information is copied across by hand. That’s a big problem when you consider that 1 in 10 companies still rely on inaccurate printed timesheets or offline spreadsheets, according to Workforce.com’s 2021 research.

At the very least, when shopping for a new time clock system, make sure to invest in a digital point of entry that automatically records the precise time employees start and end their shifts so managers can easily check against their scheduled hours. Some WFM software offers mobile GPS tracking for this very purpose, setting up a geofenced area around your workplace that staff must be inside in order to clock in on their phone. If there’s ever a dispute over hours worked or wages paid, you need your data to be irrefutable. If your only defense is an easily edited spreadsheet or drawer full of handwritten paper records, you’ve weakened your position for no good reason.

Future-proof your time clock system for the best return on investment

The labor market is changing fast, and you want a time clock app that can evolve and scale to your circumstances for the foreseeable future. Many of the systems currently used by U.S. businesses are outdated and will only become more inefficient over time.

It’s not enough to simply think of a time clock as an HR tool for checking time and attendance. It’s a holistic part of your entire business and should be as up-to-date as any other vital system. Whichever method you use to get staff clocked in and out, Workforce offers state-of-the-art app-based time clock solutions, deep reporting options, and is able to scale and grow alongside your business.

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How Whole Kids Academy better manages student-teacher ratios

Two parents and selfless dedication to their children’s education – that’s all it took to turn a simple dream into a community-wide reality. 

After eight years, Maryland-based Whole Kids Academy is still true to its roots. The Spanish immersion preschool now employs 40 teachers and serves 125 families, while still maintaining its primary vision is that children learn best while having fun; this is accomplished through creative activities, healthy diets, and most importantly, engaging teachers. 

“Our teachers are really the heart of our school,” says Hannah McNally, the academy’s director. “We can’t be successful if we don’t have really great counselors and teachers and educators there, like on the front lines, connecting with the kids, connecting with the families.”

At the end of the day, these interpersonal connections between stakeholders are the most important part of child education. Within the past year, Whole Kids Academy partnered with Workforce.com to improve its ability to cultivate these relationships by implementing more efficient scheduling and attendance systems. 

CHALLENGE

Using key performance indicators like teacher-student ratios, McNally is better able to measure Whole Kids’ relationship-building success. Proper employee scheduling plays a critical role in this process. 

“We have these ratios that are provided to us from the state and we need to make sure we’re in ratio at all times and our schedule really helps with that,” says McNally.

Whole Kids Academy needed a more transparent and unified workforce management system to effectively keep a finger on the pulse of these ratios. For a while, the school was using a word processor and Google calendar for scheduling and leave requests. “I’m really good at keeping a lot of things in my head, but that’s not sustainable,” McNally reflects. This disorganization led to a constant struggle in managing student-teacher ratios. 

As a consequence of this disorganization, accountability fell by the wayside. Teachers had the ability to clock in up to a mile away with the old attendance system. This is a common attendance challenge for organizations everywhere, and the time spent on managing these attendance problems was detracting from McNally’s efforts to build feedback loops with teachers. 

 “My greatest challenge is being able to see all of the different people and help them and meet them and support them … it’s hard when you feel like you’re unable to help someone.” 

With their old system, carving out time to conduct teacher one-on-ones or classroom observations often proved difficult. McNally knew she needed to take action to overhaul Whole Kids Academy’s scheduling and attendance capabilities.

SOLUTION

The success of child education depends on attendance accountability, proper monitoring of the student-teacher ratio, and relationship building. Whole Kids Academy found a key partner in Workforce.com to grow in these areas. The software maximizes both accountability and communication, while also maintaining enough of a human touch to foster community. Formerly tedious administrative tasks burdening Whole Kids Academy are now completely automated; the resulting time savings allow faculty to better nurture relationships with both students and teachers. 

RESULTS

Efficient workforce management is at the core of how Whole Kids Academy operates now. Here are some of the specific areas in which they have seen tangible improvement since partnering with Workforce.com:

Tracking student-teacher ratios

Perhaps most importantly, McNally can now easily view and control student-teacher ratios in every classroom. “I think that [Workforce.com] is crucial for child education systems just to allow for everyone to clearly see the schedule, see the ratios,” states McNally. “The schedule is nice and color-coded and can show you how many teachers are in a classroom at one time. So I think that it definitely supports [student-teacher ratio] needs.”

Easy and intelligent clock-ins

“I love the selfie feature … I think that they’re really fun, but it also increases accountability,” states McNally regarding photo clock-ins. With clock-in tools like photo verification and geo-fencing, McNally can quickly see proof of teachers starting days in the classroom.

Transparent scheduling

McNally creates schedules in mere minutes now, publishing directly to a single cloud-based platform for every teacher to see. “I think that an app like Workforce.com really helps increase organization productivity and accountability,” she says in regard to the intuitive nature of posting and referring to live schedules. 

Efficient timesheet approval

Teachers are regularly asked to briefly review their timesheets to make sure they are being paid correctly. “They’ll log on and see their time cards, they’ll either approve or they’ll say, actually, no, I missed a punch out on this day,” summarizes McNally. Upon approval, she can seamlessly export all timesheets into their payroll system, which Workforce.com has full integration with. 

Managing time-off accruals and requests

Whole Kids Academy has very specific leave categories to manage for all its teachers. From holidays to sick leave, Workforce.com helps McNally manage all time off hours and requests. “Everything is accrued by the amount of tenure that you have. We needed a system that would easily adapt to all of that. And I think that that’s been a great success of switching to [Workforce.com].”

The ability for all faculty to see when and where teachers are working and if they are assigned to the correct amount of students greatly improves not only ratio tracking, but more importantly, the underlying relationships between students, teachers, and management. 

The connection that comes from these healthy interpersonal relationships, both in the workplace and in the community, is something McNally sees as central to the Academy’s roots. “We really value community … I think that connectedness is really what makes our team successful.”

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Online time and attendance tracking can save you more than money

If you are still tracking staff attendance using offline methods, such as paper timesheets or even computer spreadsheets, your company is at risk of more than just money lost to inefficiency. With increased scrutiny over working hours and pay—and new labor laws likely to favor workers—sticking with outdated and inaccurate offline methods of recording on-the-clock hours can expose you to expensive legal risks. Here are the key ways in which switching to online time and attendance software for staff management will allow you to stop worrying about legal compliance and concentrate on managing your business.

Be ready for predictive scheduling

One of the most talked-about developments in labor law is predictive scheduling, or “fair workweek.” These laws are designed to protect hourly workers from unpredictable schedules and ensures they are given ample rest between shifts. Predictive scheduling laws are already on the books in multiple states and cities, with more likely to follow.

Complying with predictive scheduling laws without using online time and attendance software is a huge task. Offline staff scheduling systems require managers to spot shifts that clash with these laws by checking and cross-referencing every timesheet and schedule manually. Even with only 10 employees mistakes are easy to make and problematic shift patterns are hard to track.

The risks of getting it wrong are high, as non-compliance results in punitive fines that usually stack per individual infraction. Break the law for one worker’s shift, and you may be fined $5,000. If the same problem occurs for 10 staff, you’re facing a $50,000 penalty. Since scheduling errors rarely impact only one employee, your risk grows exponentially the more workers you have. In April this year, New York City sued Chipotle for $500 million for 599,693 infractions of the city’s 2017 predictive scheduling law. Even if you’re not operating at the level of a brand like Chipotle, the more staff you have, the more shifts you run, the higher the cost of scheduling mistakes.

The benefit of using online time and attendance software such as Workforce.com is that it can be set up with the specifics of any local state or city labor laws, automatically preventing managers from creating a schedule that will break the law. At a stroke, you’ve minimized your exposure to predictive scheduling class action and ensured your staff receives fair treatment that respects their work-life balance.

Avoid costly wage and hour lawsuits

Wage and hour litigation currently makes up the majority of employee class-action suits. Not only are they the most common legal threat faced by businesses, but more suits than ever are successful. That trend isn’t going anywhere soon. The Biden administration is making large-scale changes to the law in this area, extending coverage to protect part-time and “gig economy” workers and the payment of tips to service staff.

It’s never been more important for companies to be sure that they are correctly logging hours worked and wages paid. Using offline time and attendance methods to keep track of these business essentials is prone to error and manipulation, by both managers and employees, and problems quickly become systemic. When that happens, it only takes one employee to cause everything to unravel, as Chicago restaurant Tank Noodle discovered when one employee’s complaint about wage discrepancies snowballed into a federal investigation and a $700,000 bill for back pay to 60 staff.

Online time and attendance software covers you both ways where wage and hour suits are concerned. Software that automatically clocks staff in and out, recording their hours worked down to the second, makes it easier to spot problems and produce data in your company’s defense. At the same time, automatically connecting that attendance directly to your payroll systems means that workers get paid exactly what they have earned—and you have the data to prove it if needed.

Comply with data laws

Unlike some other countries, the US has no clear and simple federal law covering data protection or privacy. Instead, there are various proposed bills making their way through the legislatures of multiple states. California and Virginia have passed data privacy laws, but similar laws were defeated in Washington and Oklahoma. All told, 25 states are considering—or have considered—legislation that dictates how businesses handle personal data.

Excel and paper timesheets can often contain personal identifying information—phone numbers, email, home addresses, etc.—for contact reasons. These can be lost, shared, or printed out and disseminated, creating a compliance nightmare. The rise in biometrics in the workplace adds a new layer of complexity as businesses will not just be storing addresses and phone numbers but fingerprints and retinal scans, too. The Biometric Information Privacy Act (BIPA) passed in Illinois gives a good example of what such laws are likely to require.

Data protection and privacy in the US is very much an evolving topic, but whatever happens, it’s clear that spotless record keeping is going to be more important than ever. Using online time and attendance software that unifies as many of your HR functions as possible—schedules, payroll, on- and offboarding—means all that vital data is stored securely in one place but easily accessed as and when you need it should the legal position change.

Online time and attendance makes old methods obsolete

These are turbulent times for business. The world of work is changing rapidly, legislation is increasingly favoring employees, and successful workplace class-action suits are on the rise. Relying on filing cabinets full of old timesheets or a folder full of spreadsheets on an office hard drive is simply too error-prone and vulnerable in this new landscape. Investing in online time and attendance software is a long-term investment in legal compliance but also gives you the confidence that you are ready for whatever comes next.

If you are intrigued and want to learn more about how to improve in this area, our team is here to help.

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Salt Bae Sued: Rethinking Time & Attendance for Salaried Employees

Summary

  • Former cooks at Salt Bae’s New York steakhouse sue for unpaid overtime

  • Fair Labor Standards Act classifies over $913 a week as exempt from overtime pay

  • Organizations should not overlook the importance of tracking salaried employee time and attendance

 

The fateful day has finally arrived; our beloved meat-mincing and salt-slinging internet hero Salt Bae, also known as Nusret Gökçe to his parents, has fallen out of the good graces of online society. 

First launched into internet stardom in 2017 via a viral video of him eccentrically sprinkling salt onto strips of freshly sliced steak, Gökçe has since built an empire for himself out of artisanal steakhouses and social media influence. This empire started to crumble on August 9, however. Five of Gökçe’s former employees just sued him for denying them overtime pay after they consistently worked 70-90 hour weeks. 

These are some excessive hours to work with no overtime pay, even for steakhouse grillers. So what happened? Well, unlike many in the restaurant industry, the five employees were salaried. They made $1,125 a week, or around $58,500 a year. The chain also classified the grillers’ positions as managerial so as to avoid paying them for overtime.

Citing the Fair Labor Standard Act, the lawsuit claims that Gökçe’s restaurant owes the five salaried employees overtime pay for consistently working them over 40 hours a week in positions misleadingly designated as managerial in nature. 

Crazy stuff right there. Who knew that such a suave, sunglass-wearing, meat connoisseur could have incredibly manipulative intentions behind closed doors? Where is the outrage? Shall the public riot? 

Not so fast.

It is worth understanding what the Fair Labor Standards Act actually says about overtime for salaried employees. As of 2016, only salaried employees who make up to $913 per week, or $47,476 per year, qualify for overtime pay. If an employee makes more than this, they are classified as exempt from overtime pay. Taking what we know from this recent lawsuit against Gökçe, it is clear that the former grillers made over $47,476 a year in salary, meaning that they are potentially exempt from overtime pay according to the Fair Labor Standards Act.

But wait, there’s more. 

On the other hand, the FLSA provides an exemption, of sorts, to…the exemption. You see, the $913 per week ceiling only applies to “white-collar” workers – people in executive, professional, or managerial roles according to Maduff & Maduff, LLC. The FLSA says that “blue-collar” salaried employees can still qualify for mandatory overtime pay no matter how much they make in salary. Blue-collar in this case is defined by the FLSA as “workers who perform work involving repetitive operations with their hands, physical skill and energy.” Examples would include carpenters, electricians, mechanics, plumbers, ironworkers, craftsmen, etc. 

So, the natural question is this: are artisanal steak grillers technically blue-collar workers? 

Well, I don’t know. I will let the lawyers bicker over the answer in the coming weeks. What I do know, however, is that this whole mess brings up an interesting subject regarding how employers track time and attendance for their salaried employees.

You see, it was revealed that Gökçe’s restaurant chain did not keep records of the five mens’ working hours or wage statements throughout their employment. Obviously, this negligence does not help matters for the chain. When labor lawsuits like this come up, a company must have access to a paper trail that shows how many hours employees have worked and how much they have received in pay. Now, this practice may seem obvious for hourly employees; however, it is not so obvious for salaried workers.

 

Reasons for tracking salaried employee hours

Automated workforce management solutions should not be seen as exclusive to hourly workers; they can encompass all aspects of a company in any industry. Whether your salaried employees are exempt from overtime pay or not, you should consider attempting to track all their hours worked. While I should note that legally you are not required to do so, it still may be beneficial for your company. Here are a few reasons why:

 

One: Overtime Pay

This one is straightforward. If you have salaried employees who make $47,476 a year or less, they are non-exempt and legally entitled to overtime pay whenever they work over 40 hours a week. Using an automated time and attendance system like Workforce.com allows for companies to accurately and easily track how many hours all employees work, both hourly and salaried. 

Also Read: Management tips on overtime equalization and tracking hours

Two: Paid Time Off

If your employees receive PTO as part of their salaries, tracking daily time and attendance is essential for figuring out how much time they accrue as well as how much they have used.

Also Read: Managing employee time-off requests: A guide for business owners

Two: Labor Compliance

In the event of a lawsuit, you want to be sure you have records of how salaried employees have been compensated and classified. Without proof of good practice, a business is extremely vulnerable to legal trouble. Moreover, labor laws are constantly changing; it is a company’s responsibility to stay up to date on them. For instance, the FLSA policy on the ceiling for mandatory overtime is going to be subject to change every three years. If you are accurately tracking your salaried employees’ hours, you will be much better prepared for future changes to the overtime exemption ceiling. 

Three: Understanding Labor Costs

Since salaried employees don’t have clear-cut hours they need to work, it can be hard to track when they arrive, leave, and how much value they provide to the firm relative to the amount of compensation they receive. By keeping time and attendance records via an automated workforce management platform, managers can get a clearer understanding of their labor costs as well as employee productivity. Just keep in mind that legally, this can not lead to reductions in pay. Tracking hours like this should simply be used as a device for understanding employees and improving productivity. 

Also Read: How to reduce labor costs and attract quality staff in a post-Covid market

Four: Employee Burnout

Similar to identifying labor costs, knowing how many hours salaried employees are working as well as the times they start and stop work is important to managing employee burnout. An exhausted and stressed employee working odd hours is never good for productivity or company culture.

Five: Internal Communication

Using workforce management software to track salaried employee hours also opens the door for rich communication options. With Workforce.com, employees and managers alike can easily message one another, receive instant notifications, and give feedback on a vast array of subjects. Having a transparent and unified system to track time and attendance allows for salaried employees and managers to be on the same page regarding hours worked; this leads to open and honest internal communication. 

 

These are only five simple ways tracking time and attendance for salaried workers can benefit a company. To discover if this is something that might work for you, it may be worth chatting with a representative or booking a free trial. 

Let’s all learn from Salt Bae. Nobody, even a peak internet meme persona, can evade common workforce management issues all on their own. Give time and attendance tracking for salaried employees a try with Workforce.com. 

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Poor recordkeeping contributes to contractor paying $500K in back pay, fines after Labor Department probe, litigation

poor recordkeeping

A New York-based contractor agreed to pay 69 employees $500,000 in back wages and damages to resolve violations of the Fair Labor Standards Act’s overtime and recordkeeping requirements after being sued in federal court by the Department of Labor.

Investigators from the department’s Wage and Hour Division found that Maio Building Corp. and owner John Maio often directed laborers and masons to work 10-hour days, five or six days a week, knowing the FLSA required employees to receive overtime pay when they worked more than 40 hours per week. The company reached a settlement and was ordered by the U.S. District Court for the Eastern District of New York to pay $250,000 in back wages and an equal amount in liquidated damages, according to a Labor Department statement.

Clean up recordkeeping

Maio also paid employees in cash or a combination of check and cash and failed to keep accurate records of employees’ work hours and regular hourly rate of pay, according to the Labor Department statement.

Poor FLSA compliance and recordkeeping that lead to steep Labor Department fines is avoidable, said employment law attorney William J. Anthony, a partner at Blank Rome in New York. The FLSA permits any form of timekeeping system as long as it accurately records all hours worked, he said. 

Also read: How to schedule employees effectively: 5 proven steps

“Many employers use electronic timekeeping systems and payroll companies to help with compliance and avoid legal issues,” he said.

Enforce your time and attendance policies

Sonya Rosenberg, a labor law attorney and partner with Neal Gerber in Chicago, added that it’s not enough to just have written policies. 

“You want to be sure they are consistently enforced and that there are established, working procedures in place for when any corrections need to be made,” she said. “Every organization needs to ensure that all of its employees, and particularly its frontline supervisors, managers and HR staff are well trained in wage and hour requirements.”

Employers must emphasize that accurate time tracking is an essential element of each employee’s job and that failure to adhere to the rules will result in discipline, said Kara Govro, senior legal analyst at HR consultancy Mineral (formerly ThinkHR and Mammoth). Make sure employees see and read the policy. Enforcing these policies is crucial.

“If you say you’re going to be serious about it, be serious about it,” Govro said. “Write employees up, issue final warnings and be prepared to terminate if you have employees who refuse to meet your clearly articulated expectations.”

Anthony cited four ways to clean up recordkeeping practices. 

  1. Publish a policy on how to accurately record time and how to report any payroll errors.
  2. Have employees certify that their weekly time records are accurate.
  3. Train new employees on proper timekeeping.
  4. Monitor the timekeeping and payroll systems regularly to ensure accuracy. 

Anthony also said that responsibility for accurate wage and hour recordkeeping typically falls on human resources or the in-house legal department to ensure compliance. In smaller organizations, it may be the owners or management personnel who are responsible, he said. 

“Under the FLSA, an employer includes individuals with decision-making authority and operational control over payroll and wage and hour practices,” he said.

The consent judgment is the outcome of a lawsuit filed by the Labor Department’s Office of the Solicitor. In addition to the payment of back wages and damages to the employees, the judgment prohibits Maio Building Corp. from:

  • Future violations of the FLSA’s overtime and recordkeeping requirements.
  • Taking retaliatory action against employees who exercise their FLSA rights.
  • Telling any of their employees not to speak with or provide untruthful information to Labor Department investigators.
  • Soliciting or accepting the return or kick back of the wages and damages from the affected employees.
  • Threatening or implying adverse action against any employees or former employees because of their receipt of funds due under the judgment or the FLSA.
  • Otherwise obstructing or interfering with any department investigative activities.

Maio denied the allegations and said the company acted in good faith and complied with the law, according to a June 7 Equipment World article. The response said the Labor Department’s claims were barred by the Federal Motor Carriers Act and that the division had denied Maio due process rights at the closing conference by “refusing to discuss the MCA exemption,” the article stated.

Stricter Labor Department enforcement

On April 30, 2021, a settlement agreement was filed with the court in which Maio neither admitted nor denied the allegations, but that the company agreed to the settlement “to avoid the burden and expense of litigation,” according to the article.

Given that the Labor Department under Secretary Marty Walsh is stepping up enforcement versus guidance, particularly in its wage and hour division, Rosenberg urged employers to review and update wage and hour policies and practices and to make any appropriate adjustments or corrections. 

“The DOL investigators are making no secret of the department stepping up efforts and increasing penalties for noncompliant employers,” she said. “For any employer with a significant number of nonexempt employees, this should be a high-priority area.”

Interestingly, a newly released survey by law firm Ogletree Deakins notes that 47 percent of employers surveyed say that state and federal agencies are more aggressive in terms of enforcement than ever. Anthony added that between stepped-up enforcement, changing regulations and guidance, along with state wage and hour laws, it is critical that employers stay abreast of all legal developments. 

“This is an area of the law where claims can be avoided if employers regularly focus on compliance,” he said. “Conducting internal pay practice audits, regularly reviewing payroll policies, training personnel responsible for compliance, ensuring accurate timekeeping systems and payroll practices can usually avoid damages being assessed by the Labor Department or a court.”

Labor Department investigations are largely driven by employees contacting the agency, Govro said. Once that call has been made, federal laws are in play, she said. 

The Labor Department isn’t going to just “guide” an employer in the right direction when they have been failing to pay minimum wage or overtime, she added. They are going to collect the back pay.

“The bottom line is that employers need to be paying very close attention to timekeeping and accurate payment of wages at all times, regardless of the DOL’s mood,” Govro said.  

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