By Dan Whitehead
Sep. 30, 2021
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 With increased scrutiny over working hours and pay—and new labor laws likely to favor workers—sticking with outdated and inaccurate offline methods of recording on-the-clock hours can expose you to expensive legal risks.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.
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.
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.
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.
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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