Category: Compliance

Posted on

The rundown on wage law compliance: What organizations should know

wage and hour law compliance, wages

Paying people properly is crucial to workforce management. But it goes beyond releasing pay on time. It’s about compensating workers according to the work they do and adhering to all the wage laws that apply — and there are many that organizations need to navigate. 

Andrew Stirling, head of product compliance at Workforce.com, sheds light on what companies need to know about complying with wage laws, the real cost of failure to comply and the different ways organizations can meet requirements under varying rules and regulations. 

Setting a compliance strategy

“To have a compliance strategy, you need to start by knowing what the rules are. That might sound trite, but you need a system for keeping current as the rules change,” Stirling said. 

Businesses are generally good at evolving their practices in the face of law and regulation changes. While there’s a level of adjustment when new laws are implemented, companies tend to adapt efficiently, he explained.

Identifying the type of employment relationship a business has with its workers is crucial to getting the rules right. This has become more important as the types of work relationships have multiplied.

“With the gig economy growing, more and more workers are being engaged to work in nontraditional ways. Generally, a worker in your business will be either an employee or an independent contractor. Businesses need to be careful to assign workers to the right category, because getting this wrong means that they may not meet all the wage laws that apply,” said Stirling. 

Once the rules are known, it’s time for the business to assess and implement solutions to comply with those rules. The solutions can be more than just the obvious.

For example, employee scheduling can play a key role in wage compliance. When creating schedules, managers need to be aware of when overtime will apply and how much the business must pay for those hours when it does. This becomes challenging for managers with a group of employees under different working arrangements. Without good solutions, things can fall through the cracks, resulting in underpayment or higher labor costs.

The real cost of noncompliance

Noncompliance can result in crippling financial repercussions, but it also can cause reputational damage.

“The financial costs of noncompliance are obvious,” Stirling said. “For example, if employees have been underpaid, the business might have to make large amounts of back payments in one hit. You need to have the cash on hand for that.” There are other financial costs, like penalties and legal costs to contest a court case.

But there’s also the real potential for reputational damage. That’s often a more significant motivation for employers to comply.

“An underpayment scandal can bring companies to their knees. 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,” he said. 

Aside from a less favorable customer perspective, companies with underpayment issues can risk losing in the labor market, he said. When looking for a job, people tend to sort out who the good and bad players are, and wage compliance can be a huge factor.

Ensuring compliance at all levels

While wage compliance may mostly be seen as a job for payroll teams, HR and managers also play a crucial role. Payroll teams would primarily be responsible for the final pay outcome.

“From a payroll perspective, I would be focused on two things. One is making sure that I understand the complex wage rules that apply. The second thing is making sure that I have the correct data. Am I getting the information that I need to properly calculate pay? Are we capturing time and attendance accurately? Yes, knowing the rules are important, but the inputs need to be correct, too,” Stirling said.

HR has a leading role here. They need to have a good understanding of the business and the particular wage rules that apply. It’s also their responsibility to ensure that the right systems are in place for wage compliance. 

wage law compliance“In my experience, HR will often document the duties of a position and then help to assign those duties to a particular minimum wage,” Stirling explained.

Managers, meanwhile, have a role in ensuring that all inputs are correct. They monitor that employees are recording time correctly and that there are no discrepancies.

“If rules in a particular jurisdiction require employees to be paid more for doing particular types of work, managers are the ones who will know,” he said. The extra payments might include allowances, commissions, bonuses and tips to the extent that they are relevant in a jurisdiction.

Managers generally play less of a role in ensuring the amount on a paycheck is correct. Still, they follow processes and systems that ensure all the information passed on to payroll is accurate. 

Compliance challenges per industry

Different industries face varying compliance challenges. A lot of this difference comes from meeting customer demand or expectations.

If customer demand comes in after standard business hours and on weekends, that’s when employees need to be at work. Working outside standard business hours often will entitle an employee to overtime or other financial obligations.

“If you’re in retail or hospitality, you’d miss out on opportunities if you just open from 9 to 5. Efficient workforce management can meet these demands with cost-effective shifts without compromising service and wage law compliance,” he said. 

Similar issues arise in industries that make use of machines and equipment that are most efficiently run 24/7. Mining, oil and gas, and manufacturing companies often run this way. Stirling said that this scenario also puts businesses in a space where they pay different penalties that come with varying shifts and work hours.

On the other hand, there are many industries where working standard office hours is still the norm. “Calculating pay for people who get to work at 9 in the morning and leave at 5 in the afternoon is usually relatively easy,” he said.

Ways to stay at pace with labor law changes

There are many moving parts involved with wage law compliance, and staying on pace is crucial. 

“Going to the source is always best. That’s a good start,” Stirling said. He advised signing up for government websites that explain what the law is. Businesses can often sign up for alerts to be updated should any of the laws change.

There are also subscription services to stay abreast of the labor law, including publications and journals. Another option is to join employer associations that can help keep track of changes as well. 

Overcoming wage compliance challenges 

Having the right people, implementing the right systems, and investing in the right technology — Stirling believes that these things can help businesses comply with wage laws. 

Computers are binary and will give an output based on the input. Automated compliance is more efficient and effective than human-driven compliance. Companies must implement the right systems to make sure that both people and technology can function effectively. 

“I’m a big believer in technology as a solution to a lot of these problems,” he said. “That’s where the future is. As technology becomes more powerful, the types of work that people are doing will change. They’ll spend less time crunching numbers, for example, to make sure pays are right and spend more time checking that the inputs into the technology are right.”

Posted on

COVID-19, hazard pay and overtime

Wage and hour compliance is complicated enough for employers. Layer a pandemic on top of wage and hour compliance, and you have an absolute nightmare for companies.

Consider, for example, hazard pay.

Suppose you are a private-sector employer that decides to offer your employees a monetary incentive to return or remain at work during the pandemic. Must you include this hazard pay in the regular rate when calculating the overtime premium for non-exempt employees receiving this payment?

According to the Department of Labor, the answer is yes.

Yes. Payments your employer provides you to perform work constitutes compensation for employment that must be included in the regular rate, subject to eight exclusions described in section 7(e) of the FLSA. None of those exclusions apply to the incentive payments described above.

The answer changes, however, if the payments are made pursuant to a state or local government program, directly from the government or indirectly passed through the employer.
Bottom line? Wage and hour issues are complex; pandemic wage and hour issues are even more complex. If you have any doubt whatsoever about whether you are correctly paying your employees, reach out to your friendly neighborhood employment lawyer for guidance.
Posted on

Management tips on overtime equalization and tracking hours

scheduling; time and attendance; forecasting

Many schedules like 24-7 operations have built in overtime, just to make sure there’s coverage, but in any organization there’s potential that employees may accrue unplanned overtime. For managers trying to run a tight ship, this can complicate a precisely planned schedule and budget. 

Sometimes there’s too much work and not enough resources or employees to accomplish these tasks, leading companies to give too much overtime. “That’s a matter for management and leadership to assess and to determine whether they need to hire additional talent,” said Chuck Buiocchi, senior director of BPS operations at Kelly Services.

It’s vital that managers get payroll correct, and while many companies still use old school paper time cards, third party platforms can help a lot, he added. 

Several workplace experts shared management tips for organizations trying to manage overtime more accurately and precisely. Here is their advice. 

Overtime equalization can help you decide who gets extra hours

Some employees may want more overtime hours to help ensure financial stability, Buiocchi said. Managers want to be fair to employees in situations like this, and if there’s more demand for overtime than supply, they’ll want to create a method of allocating those hours fairly. 

Overtime equalization — the attempt to balance overtime among employees — can be dependent on factors like employee tenure and reliability. But more often than not, organizations have to consider the people with the most relevant skill sets first, Buiocchi said. 

Sometimes overtime is built into schedules and interested employees can ask for those hours, but in general managers want to avoid unnecessary overtime as much as possible. 

Also read: A technology integration is an intervention to dissolve common payroll errors

The key here is understanding the root cause of this increased need for labor, Buiocchi said. If employees are spread too thin, maybe it’s time to hire more employees. If the reason for more overtime is a decrease in productivity, drill down on what’s impacting productivity and address it. This is a much bigger project and requires deeper discussion, but it’s necessary if something is impacting the team to such a degree, he added. 

Allocating overtime hours during the pandemic 

The COVID-19 pandemic has complicated overtime allocation to some degree. Now when determining overtime equalization, organizations may deal with a world of juxtaposition, said Traci Fiatte, chief executive officer, professional and commercial staffing at Randstad US. Some employees are dying for extra hours and income for a variety of reasons, like those working 60 or 70 hour weeks at two different jobs because their spouse lost their job. But others don’t want to go to work at all or are scared. 

Meanwhile, employers are desperately trying to manage overtime and not pay it, because many organizations’ revenues have declined since the pandemic began. 

Smart scheduling is especially important during the COVID-19 pandemic, when offices or places of operations might have to stagger out their shifts so that employees can be socially distanced, Fiatte said. Or maybe they need to operate at a lower capacity than usual so that employees can more easily stay away from each other. She also suggested adopting scheduling tools that allow managers to take floor plans into account as they create schedules and socially distant staff appropriately. 

“Overtime is best managed when you know who is working when and where, even in terms of floor planning —  which is a concept we never had to worry about pre-COVID. We certainly had to worry about shift scheduling before, but we never had to worry about who was where,” she said. 

scheduling, labor tracking

Even during the COVID-19 pandemic, companies are eager to produce as much as they usually have or more, but whether or not they’ll have the same employee headcount as before is uncertain, she said. And with fewer employees, maintaining that production schedule can be tricky.

One strategy organizations have adopted to address pandemic challenges is relying on more shifts with fewer employees, she said. During times like this, that may be more effective than longer shifts with more people on the floor at the same time. 

Actions speak louder than words

One of the main problems with labor tracking and monitoring is that it’s difficult to accurately track or monitor overtime, said Albert Rizzo, adjunct assistant professor at the NYU School of Professional Studies within its human capital management program. HR needs to do it and not just pretend to do it, he said. 

Also read: Shift scheduling strategies can be improved through technology

Also, he added, HR needs to make sure the overtime policy is not just a few lines in the employee handbook but something that’s actionable. Best practices here depend on the size of the company. 

For a mid-sized company with many employees, for example, one common mistake is that HR is given the responsibility to track labor, Rizzo said. But it’s actually be more efficient and accurate if lower level managers were given the task of tracking this.

“Rather than put the burden on one department like HR or one HR manager to track, the best practice would be to get the person closest to the employees typically incurring the overtime and have that person manage it,” he said. 

While many managers view overtime as a problem, they should be looking at it more from the solution mindset, he added. When team members are accruing too much unplanned overtime, there’s a solution to be discovered. Managers can speak to the people accruing the extra hours and find out why that’s occurring. Maybe there’s no clear policy on what constitutes overtime and what doesn’t. Maybe the location is short staffed.

Ensure that your employees are properly classified

HR needs to make sure they’ve properly classified employees to begin with so that exempt employees are truly exempt and nonexempt employees are truly nonexempt. Misclassification frequently happens in HR, Rizzo said. 

Regarding overtime, perhaps an analysis could be done on what exact duties employees are performing. Managers can potentially shift certain duties from A nonexempt employee to an exempt employee who won’t be paid overtime for working extra hours.

“HR should be very careful about classification of exempt and nonexempt employees,” he said.

Cover your tracks with labor tracking 

An important part of this conversation is what the burden of proof is on overtime claims and who holds that burden, Rizzo said. If an employee claims they have worked unpaid overtime, employers must have the information on file to disprove that claim. If the employer doesn’t have any records that accurately track if the claim is true or not, the U.S. Department of Labor will pursue assuming the employee is telling the truth.

Also read: Labor analytics: A how-to guide for company leadership

“If an employee says 60 hours and the employer has no way to refute the claim or doesn’t refute it sufficiently, then the employee’s statement of how many hours they worked will be taken as the truth,” Rizzo said, adding that this is something employer often take for granted or don’t know.

“There has to be a real tracking system, Rizzo said. “It doesn’t have to be sophisticated but it does have to be monitored carefully.”

Posted on

Incentive plan gives EMTs a new reason to ride with Ambulnz

Ambulnz, incentive

A career as an emergency medical technician can be a demanding grind.

While there are clear rewards in such a compassionate, public-facing job, an EMT typically works long shifts, juggles hectic schedules and gets mediocre pay. Median compensation for EMTs and paramedics was $17.02 in 2019, according to the U.S. Bureau of Labor Statistics.

A 2018 survey from the American Ambulance Association found that poor pay leads to high turnover among those working in the emergency medical services industry, which sees an annual turnover rate of 25 percent among full-time EMTs. 

Facing turnover and retention concerns like much of the rest of the EMS industry, executives at Ambulnz sought solutions to retain its EMTs. The New York-based non-emergency, on-demand ambulance service sought to improve medical transportation through innovative technology, a higher level of care and better compensation for EMTs.

Retaining employees through incentives

In order to get the most qualified first responders, Ambulnz designed a novel benefit for its 1,200 hourly employees. The Equity Incentive Plan was created to encourage, recognize and reward exceptional performance for its employees, said Ambulnz President Anthony Capone.

Also read: Automate how your staff clocks in and out while cutting hours of admin work each week. 

“We have been speaking about creating the Equity Incentive Plan for a couple of years and fully put it into effect for 2019,” Capone said. “It’s a path to entrepreneurship and the ability to build meaningful careers in the ambulance service.”

Capone pointed out that Ambulnz, which operates in eight states including New York, New Jersey, California, Texas and Illinois as well as the United Kingdom, distinguishes itself from the typical on-demand company such as Uber and Lyft through its business model.

“On-demand ride share companies have a business-to-consumer model, provide point-to-point transportation as an alternative to a taxi service and use independent contractors to provide their service,” Capone said.

“Ambulnz has a business-to-business model, provides medical transportation and we own our fleet of ambulance vehicles and employ full-time EMTs and paramedics.”

Ambulnz offers different levels of services ranging from a wheelchair-bound patient transport to a critical care transport, he said. When a patient needs to be moved to a new facility for treatment out of a hospital, outpatient treatment clinic, doctor, dialysis or chemo center, a pickup can be scheduled through the Ambulnz app, Capone added.

Case Study: Hoffer Plastics’ ‘family first’ philosophy puts people over profits

The vast majority of Ambulnz’s 1,300 employees are W-2, and only full-time employees are eligible for the incentive plan, he said. It differs from a startup’s typical equity compensation plan, he added.

“Usually startup companies provide equity compensation to new hires to entice them to bet on a relatively unknown company,” he said. “We are an established, growing company with over 1,000 employees. While it is not uncommon for tech startups to offer equity compensation for employees, Ambulnz is the only company in the medical transportation industry that offers this benefit to frontline employees.”

The incentive program was created to reward employees for their exceptional performance, he said. With that in mind, they decided to provide 2,000 equity units for each 500 trips eligible employees take in the previous year.

“This is based on volume, but performance is taken into account when employees become eligible for the program,” Capone said.

Besides the incentive plan, Ambulnz offers a base salary, medical benefits, bonuses and an optional “model program” for EMTs that offers them the ability to earn more than the national average for their profession, Capone said.

“EMTs who enroll are paid in part based on the number of calls they respond to,” he said. “In addition, EMTs are encouraged to stop by different outpatient centers, such as nursing homes, to introduce themselves, explain Ambulnz, and drop off a business card.”

Capone said the incentive program helps employees feel like they are part of the Ambulnz team and inspires them to do their best. They officially launched the program by issuing awards for employees 2019 trips, so there aren’t metrics to share yet, he said.

“The announcement has certainly energized our workforce, and numerous employees are inquiring about their 2020 trip counts to see how they’re tracking for this year,” Capone said. “Since its rollout, the plan has been a successful way to attract, retain and motivate our employees.”

There’s no need to wait until it’s too late to adjust the flow of work. You can see wage costs in real time and adjust staffing levels and assignments to maximize profitability with Workforce.com’s Live Wage Tracker.

Posted on

Labor tracking in an increasingly complex legal environment

labor analytics, people analytics

Labor tracking is necessary for employers to ensure they’re paying their workforce correctly, but the unique labor laws of certain cities and states throw a wrench in an organization’s practices. 

The word “complex” does not even scratch the surface of how complicated labor tracking is given the various state and local labor laws that govern sick leave, overtime, minimum wage and more, according to Traci Fiatte, chief executive officer, professional & commercial staffing at Randstad US. “If you’re not using an automated [employee] scheduling software and you have employees in multiple states, I’m not sure how you keep track of it all,” she added.

According to Workforce.com’s 2020 “HR State of the Industry” report, only 40.5 percent of respondents said they used HR software for workforce management, including time and attendance, and only 29.5 percent said they used it for compensation management. There’s still room for improvement for organizations who’ve yet to use automated software to help with labor tracking and management. 

Rely on specialized employees and software

Fiatte suggested that organizations have personnel dedicated to understanding varying laws and a payroll system that can be programmed to understand the different laws. 

For example, overtime is an area of labor law where different regulations can confuse an already complex process, and software may have the capabilities to allow managers to take overtime laws into account when they plan schedules. In most states, “overtime” is defined as anything more than 40 hours a week, but in California it’s defined as more than 8 hours worked in a day. 

“Unless you have a system to track that, you almost need a staff dedicated to manually tracking it, which I can’t imagine any large employer being able to do,” Fiatte said. “The name of the game is automation and making sure you have the right systems to help manage it.”

The biggest gap here is that while big national brands have this figured out, others may not. 

“The companies I worry for are the companies that are small enough that they may be family-owned, regionally-based or [spread across] four or five states, but they don’t have the level of sophistication to have legal teams or HR teams to be managing the variances between state laws,” Fiatte said. “It’s those companies that could be taken by surprise two years from now when they get audited, and they’ve broken a bunch of laws they didn’t know they were breaking.” 

Organizations in a situation like this can find a specialist to help them manage the dynamic and complex labor law environment, she added.

Encourage managers to stay up to date on the latest labor laws

Chuck Buiocchi, senior director of BPS operations at staffing company Kelly Services, said that at his organization they use the latest technology to ensure managers aren’t expected to know everything. They also have a group whose sole purpose is to keep the rest of the organization abreast of changing labor laws. 

Buiocchi said he would encourage managers to stay as up to date as possible on changing labor laws. While they may not become experts, keeping themselves educated is a smart thing to do. employment law, labor law

Keep documentation 

Labor tracking helps organizations control wage costs, but that’s not the only benefit. It’ll also help any organization audited by the Department of Labor. 

“I can’t stress enough the importance of labor tracking, not only from a financial standpoint in terms of making sure people are paid properly but even in terms of the legal standpoint,” said Albert Rizzo, adjunct assistant professor at the NYU School of Professional Studies within its human capital management program.

“If the company ever gets audited by the Department of Labor, it only takes one employee to make a complaint about failure to get paid minimum wage or overtime for that to trigger an audit by the Department of Labor,” he added. “And once that audit is triggered, they could very well go after the employer and every employee to see if the employer has paid any one of those employees improperly, even if they’ve never lodged a complaint.”

Encourage straightforward conversations 

Companies must be very deliberate about payroll policies, procedures and expectations and how that information is communicated among leadership, management and employees, Buiocchi said.

“We will not allow people to work off the clock,” he said about his own organization. “We don’t trade for comp time or anything like that. We live to not only the letter but the spirit of the laws in which we operate, and we expect our leaders and our employees to do the same. And we set those expectations and we manage the performance for those who don’t meet those expectations.”

Also read: Give managers the time they need to sharpen up their all-around skills

If someone works off the clock, in this case, supervisors can have a conversation with that employee, make sure they get paid, make sure they don’t do it again and discipline them if necessary. Maybe the supervisor finds out that the direct manager of the employee is mismanaging something or overworking employees, and then it’s up to the supervisor to find a resolution for that.

Posted on

Companies may pay the price for poorly managed payroll practices

compensation, payroll, blue collar

Culture may eat strategy for lunch, but a fair, well-oiled compensation plan can gobble up culture for breakfast, dinner and maybe even a midnight snack.

While culture indeed is crucial to engagement and retention, compensation still remains near or at the top of most employee satisfaction surveys. Poorly run compensation and payroll practices makes engaging employees an impossibility if they are not being paid fairly and on time.

Get a handle on your payroll practices

Employees deserve their paychecks on time. They also deserve to be accurately compensated for the time they put in. Both of these points may seem to be forgone conclusions when it comes to an organization making its payroll.

But according to a survey earlier this year, 32 percent of small business owners have made a payroll mistake at least once. What is more troubling, the same survey also noted that it took 56 percent of business owners longer than 24 hours to fix a payroll mistake.

That’s a problem for any employee. For those living paycheck to paycheck, a payroll snafu can be devastating.

Also read: Knock out the practice of buddy punching for good

Considering that employee engagement figures typically hover somewhere around 33 percent in good economic times and in bad, there is no faster way to turn a loyal staff member into a disengaged one than a blunder with payroll.

Automate payroll processes to eliminate delays and errors

Automating payroll may initially seem imposing. Organizations are locked into legacy practices, and payroll typically is one such function.

Some 39 percent of small business owners spend one to three hours on payroll per week. That’s hundreds of hours spent poring over timesheets, tapping digits on a calculator, assessing overtime and finally scratching out checks, which if the sun, moon and stars properly align there won’t be any mistakes.

Save a tree, cut back on paper-based payroll

Many organizations rely on a paper-based system, too. A 2017 survey revealed that 65 percent of people surveyed said that HR information is still managed using paper documents, paper-based processes and stored in filing cabinets. 

Implementing a payroll solution not only improves the company’s bottom line but it minimizes hours of repetitive tasks and effort spent on high-volume, low-value work. The result is a better functioning payroll system that affords time to focus on correcting errors, improving processes and delivering payroll efficiently and on time. Automation is assisting payroll teams perform their jobs in several ways. 

Managing compliance risks

It’s a challenge to stay abreast of tax laws, rules and regulations, especially for organizations working across multiple states. Payroll mistakes are costly and learning all the nuances to stay in compliance is a huge time drain. It’s crucial to stay on top of what it takes to remain compliant to reduce legal liability. Workforce.com’s payroll integration platform is designed to keep pace with labor law changes and ensure that pay rates are always updated. 

Gathering the metrics

Collecting timesheets from multiple departments and in varying formats is the height of payroll inefficiency. An automated payroll solution turns data collection inefficiencies into a faster and simpler task.

Move data quickly

An automated, integrated platform also allows for the smooth transfer of information between systems. There’s no need to wait on various departments or managers to file and then crunch their data.

Added expenses due to poor data entry errors and payroll oversights are avoidable. By upgrading an outdated payroll function with an automated platform eliminates inefficiencies, promotes compliance and allows employers to stay on top of wage costs.

With employment contracts, timesheets, benefits and labor laws, there are a lot of factors involved in payroll that can result in miscalculations. Workforce.com’s payroll integration solution connects with more than 50 payroll systems to ease compliance and enhance efficiency.

Posted on

Knock out the practice of buddy punching for good

buddy punching; clocking in

Clocking in for a colleague may come as a wink and a nod between coworkers. But the practice of buddy punching is time theft, plain and simple, and it can land a gut punch to managers trying to ring in their scheduling problems and labor costs.

However, advances in workforce management technology and mobile solutions are pulling no punches against those clocking in for a colleague who is running late or worse, randomly decides to take an unauthorized day off.

 What constitutes time theft

It may start innocently enough. The train is stuck. The babysitter arrived late. But without a manager’s approval, time theft is easily defined.

  • Employees start shifts late.
  • An employee leaves shifts early.
  • They take breaks that are longer than scheduled.
  • They work overtime that wasn’t authorized
  • An employee engages in personal or non-work-related activities while on the job.

And then there is buddy punching.

The financial sting of buddy punching

Time theft puts an alarming drain on an organization’s finances. One 2018 estimate pegs the cost of buddy punching at over $370 million in payroll costs annually, and according to research by the American Payroll Association, buddy punching affects about 75 percent of U.S. small businesses.

Also read: Make managers more successful with the tools to retain and engage their employees

Additionally, businesses lose 5 percent of their annual revenue to employee fraud, and buddy punching is fraud. Businesses with fewer than 150 employees are more likely to take it on the chin due to employee fraud schemes like time theft.

What leads to buddy punching 

buddy punching; clocking in

Some employees simply will take advantage of a situation when they know they can. A lack of adequate technology with proper checks and balances often sets the path to one worker punching in for another. Even implementing a system with RFID cards or passwords can be manipulated.

Lacking proper technology, multiple employees can utilize passwords and credentials to punch in for one another if the system does not detect who uses the password, and employers have a difficult time proving time theft.

Employers also naively foot some of the blame. They can develop a false sense of security since they may have hired and gotten to know the people working for them. And, because they know them, they are confident that none are bad people who would steal from them. Adequate workforce management software creates a more objective, unbiased approach to the time and attendance process.

Counterpunching time theft

There are solutions to sparring with buddy punching. By automating how staff members clock in and out with mobile solutions, not only can time theft be curbed but hours of needless administrative tasks be cut back.

Record when your employees punch in and out with Workforce.com’s time clock. From ensuring the right person clocks in for the shift to paying staff correctly, it starts with the mobile time clock app.

Such a solution assures that the right person clocks in for the right shift through electronic photo verification and unique passcodes. These, along with payroll add-ons, also let employers do away with lengthy steps in computing payroll.

Going mobile

Mobile time and attendance solutions also help manage employees remotely without having to question time and attendance records. Such automated solutions also build trust. By not relying on pen and paper bookkeeping, employees gain the confidence to know they won’t have to follow up or scrutinize recordkeeping to make sure they are being paid fairly for their work.

Why pay for hours that weren’t worked? Make the practice of buddy punching tap out and fight the scourge of time theft with Workforce.com’s time clock app.

Posted on

Overtime and FLSA outside sales exemption

employment law, labor law, overtime records

Eugene Martinez was a sales representative for Superior HealthPlan, Inc. Martinez’s duties included soliciting Medicare Advantage Plans. Superior classified Martinez as an independent contractor pursuant to the terms of his sales agreement. Martinez subsequently filed a lawsuit against Superior, alleging that he was misclassified as an independent contractor and was entitled to overtime pay under the Fair Labor Standards Act. Superior  filed a motion for summary judgment regarding Martinez’s FLSA claim, arguing that even if Martinez was an employee he would not be entitled to overtime pay because he fell under the FLSA’s outside sales exemption.  

The U.S. District Court for the Western District of Texas held that Martinez was not entitled to overtime pay because the outside sales exemption applied. The court assumed that Martinez was an employee for purposes of argument and focused on Martinez’s actual job duties for Superior. The court noted that Martinez spent virtually every weekday in sales appointments away from Superior’s offices. The court deemed that the FLSA’s outside sales exemption applied and Martinez to the extent that he should have been classified as an employee and was not entitled to overtime pay. Martinez v. Superior HealthPlan, Inc., 371 F. Supp. 3d 370 (W.D. Tex. 2019). 

IMPACT: Companies that employ sales representatives should be aware of the fact that such employees are not automatically exempt under the FLSA. Under the FLSA, an employee may be classified as exempt from overtime pay if he or she is paid above the FLSA’s earnings threshold and his or her duties meet one or more exempt “duties test” categories (i.e., executive, administrative, professional or outside sales exemptions).

Posted on

President extends PPP loan forgiveness, signs Paycheck Protection Program Flexibility Act of 2020

CARES Act, coronavirus

The Paycheck Protection Program Flexibility Act of 2020, which President Trump signed into law on June 5, makes several key business-friendly changes to the small business loans made under the CARES Act’s Paycheck Protection Program.

Specifically, this Act:

  • Extends the “covered period” borrowers have to use PPP loans and qualify for loan forgiveness from the original eight weeks to the earlier of 24 weeks from loan disbursement or Dec. 31, 2020.
  • Extends until Dec. 31, 2020, the CARES Act’s June 30, 2020, deadline to rehire employees and reverse salary cuts of more than 25 percent.
  • Exempts borrowers from the reduction in loan fordeadline to rehire employees and reverse salary cuts of more than 25 percent. giveness because of a reduction in employee headcount if the borrower is able to document in good faith that from Feb. 15 through Dec. 31, 2020, the borrower: (a) was unable to rehire employees who had been employed on Feb. 15 or hire similarly qualified employees for unfilled positions by December 31, 2020; (b) was unable to return to the same level of business activity at which the borrower was operating pre-Feb. 15 as the result of compliance with requirements, guidelines, standards for sanitation, social distancing, or other COVID-19 employee or customer safety issues.
  • Lowers the threshold for the use of PPP loan funds for payroll purposes from 75 percent to 60 percent.
  • Allows for an agreed-upon extension of PPP loan repayment from two years to five years.
  • Eliminates the CARES Act’s restriction on the deferral of payroll taxes for employers who receive PPP loan forgiveness.
As Suzanne Lucas (aka the Evil HR Lady) points out, this Act’s biggest benefit might be the gift of time it gives to employers to staff up. “Hiring is always a difficult part of running a business, and the terms of the original PPP put pressure on companies to act quickly.” She added, “If you don’t need someone working yet, you can wait until you do need someone in the position.”
Suzanne is correct. Even in the best of circumstances, hiring is time-consuming and difficult.
The current circumstances are far from best, and businesses that took PPP money felt tremendous pressure to hire by June 30 to qualify for loan forgiveness. Employees hired in haste often lead to mistakes. These amendments offer significant relief through the benefit of added time.
Posted on

A technology integration is an intervention to dissolve common payroll errors

pay for performance, payroll, compensation

Paying employees accurately and on time should be a forgone conclusion for employers. But that’s not always the case.   

Incidents of unfair pay practices have surfaced since the COVID-19 pandemic hit. Lawsuits involving wage discrimination and unfair compensation practices also can cost an employer tens of thousands of dollars in damages.

According to law firm Seyfarth Shaw, wage-and-hour settlements are a leading cause of litigation exposure for corporations and that HR leaders must focus on prevention. While the majority of companies are fair and honest regarding their compensation practices, errors can occur. Prevent those mistakes from creeping into your compensation function by integrating workforce management software with your payroll software.

Eliminate the mistakes

Wage-and-hour lawsuits are unnecessary and largely avoidable. Payroll integrations in your tech stack can help ease a complex, arduous process fraught with opportunities for mistakes.  By integrating a payroll system with Workforce.com’s platform for automated timesheet exports and calculations, a company can negate costly wage-and-hour lawsuits.

  1. Poor record keeping and data entry. Mismatching names and Social Security numbers is so common that, according to AllBusiness.com, the Social Security Administration has established a special verification phone number. Errors in data entry and poor recordkeeping of employee hours can result in costly government penalties.
  2. Misclassifying employees. The number of temporary employees and independent contractors continues to grow among the labor force, and organizations constantly confront problems in properly classifying those workers. Are they exempt or nonexempt employees? Are they an independent contractor or an exempt employee? While the Fair Labor Standards Act provides protections for most employees, it’s still easy to slip up on employee classifications without an integration of workforce management software into the payroll function. If neglected, it can turn into a costly payroll error.
  3. Miscalculating pay and overtime. Poor time-tracking capabilities can lead to miscalculated pay. There are guidelines that must be followed when determining overtime, and miscalculations can be costly. Besides overtime, there are commissions and paid time off, among other things to track. State policies vary and it’s a best practice to default to the law that is more generous for the employee. Workforce.com’s payroll integration technology can help retool poor time tracking capabilities.
  4. Adherence to pay deadlines. Payroll is the basic bond between employer and employee. While payroll should function like a well-oiled machine, missing deadlines can happen. Payroll technology can help with establishing a payroll calendar that encompasses deposits as well as timely payroll tax filings with federal and state agencies. Remember, late deposits can result in penalties and interest charges. Oil up the payroll machine and set up timelines both internally for paydays and externally for taxes for a smooth payroll process.
  5. Mishandling garnishments and child support. An employee may owe money through a court order to other parties. Payroll is responsible for sending the money to the appropriate person or agency.

Avoid payroll errors

To avoid costly wage-and-hour lawsuits, HR and business leaders should keep these tips in mind:

  • A reliable payroll software program maintains accurate time-keeping and record-keeping practices through up-to-date systems.
  • Supervisors must recognize the differences between exempt and nonexempt employees.
  • Rather than hide it until it’s too late, encourage managers to proactively report wage issues.
  • Conduct wage-and-hour audits to ensure correct classification of employees.
  • Assess your independent contractors. 

Keep payroll mistakes from disrupting your organization by investing in payroll software. Workforce.com’s payroll system integration technology works seamlessly with more than 50 different payroll systems. Process your payroll minus the long hours, avoid the errors and easily run reports, file taxes and distribute pay stubs.