Tracking employee time can really add up

Managing employee time is an essential part of most businesses, from retail to manufacturing to professional.  The Patient Protection and Affordable Care Act (PPACA),  or Obamacare, has put new focus on employer calculations of time, in order to calculate the status of their workforce.  Here is a real-world example:

The PPACA mandates that employees with more than 30 average hours per week (based on a calculated look back period average of between 90 days and one year) be deemed full time for the purposes of health coverage.   This company’s cost will be a minimum of $2,000 (tax) up to the cost of family health insurance for this employee ($15,000)

A more global tracking issue that affects costs for all employees in your company is simply the LOSS of time due to inadequate data collection.  The Return on Investment (ROI) of investing in current technology and data capture is well documented in human error, auditing, and lost time.

In the following example, bad timekeeping costs this 50-member employee group more than $21,000 per year, or $439 per employee per year. This shows the effects of an inadequate data collection system*:

Human Error Factor Savings- A

A

     Number of Employees

50

B

     Average hourly rate

$10

C

     Average hours worked per week

38

D

     Total weekly payroll (A x B x C =D)

$19,000

E

     Human error factor

0.25%

     Total weekly savings (D x E)

$48

 

Auditing Savings- B

A

     Number of Employees

50

B

     Minutes saved per card

6

C

     Total pay period minutes saved (A x B=C)

300

     Total pay period hours saved (C/60)

5

     Hourly rate for Department Heads

$25

     Weekly Department Head savings

$125

 

Lost Time Savings- C

A

     Lost productivity per day

0.1

B

     Avg. employee’s rate/hour

$10

C

     Avg. wages overpaid/day/emp (A x B= C)

1

D

     Avg. wages overpaid/wk/emp (C x 5)

5

E

     Total number of employees

50

     Total wages overpaid/wk (D x E)

$250

 

Summary

A

     Human error savings (F1)

$48

B

     Audit savings (F2)

$125

C

     Lost time savings (F3)

$250

D

     Total weekly savings (A + B + C)

$423

 

Total annual savings (D x 52)

$21,970

 

Savings/worksite employee

$439

*Studies conducted annually by national payroll and staffing associations

BCN works closely with its clients to create efficient, cost-effective data capture of employee time, which gives clients greater control of scheduling and time management.  Call us at (800) 891-9911 for further information about tracking your employees’ time.  Or contact us here.

AndyHans_6698

Andrew (Andy) C. Hans, CEO

Time is Money: What is Compensable Time?

Working outside of one’s scheduled work time without compensation is generally known as “working” off- the-clock. The United States Department of Labor (DOL) recognizes off-the-clock work as one of the most common violations of the Fair Labor Standards Act (FLSA).

The Fair Labor Standards Act provides information about the type of work for which an employee must be compensated. Under the FLSA, a work day begins when an employee starts his or her “principal activity,” and ends when finishing the last principal activity of the day. The FLSA definition of a work day may be longer than an employee’s scheduled shift or normal office hours.

Listed below are some of the more common off-the-clock violations:

  • Requiring employees to work extra hours without pay.
  • Requiring employees to perform work before or after they clock in for their shift.
  • Failing to pay employees for the entire time they are performing work, not just the time they are “clocked in.”
  • Automatically deducting a meal period from an employee’s hours when no meal period was actually taken.
  • Deducting break time(s) from an employees work hours.
  • Requesting that employees work on the weekend without clocking in.
  • Failing to compensate employees who bring work home and continue to work outside of their “regular” workday.
  • Failure to pay employees for pre- and post-shift work. These activities involve “donning” (putting on) or “doffing” (taking off) protective equipment or uniforms.

Our advice is to not leave employees guessing about your Company’s policy on off-the-clock work. Make it clear that off-the-clock work is not permitted and that there may be disciplinary action for it. Set up a process encouraging employees to report off-the-clock work to the HR Department without fear of retaliation.

The policy should give clear instruction to employees, as an employer’s effort to prevent off-the-clock work will be a key element of its affirmative defense of an off-the-clock work claim.

As always, it is imperative to know and understand all of the regulations that apply to your business at all levels: federal, state, and local. Failure to know and apply these regulations can lead to hefty fines.

BCN Services’ Human Resource Department  is available to you to help in implementing a compensable time policy, if you do not currently have one in place. Call us at 1-800-891-9911 or visit us at www.www.bcnservices.com.

Kate Douglass (200x174)

Kate Douglass, Senior HR Specialist