How a Timekeeping System Helps You Prevent Some of the Most Common Wage and Hour Risks
There are many different options to choose from when keeping track of employee time and attendance. However, some timekeeping methods are much better than others. While there are numerous electronic options, many businesses continue to keep track of employee time using manual methods like pen and paper. Though commonly used, this method can be inefficient and costly.
Here are a few of the most common timekeeping errors you should be aware of:
Human Error – Everyone makes mistakes. Because calculating payroll can be a very difficult task, the probability of errors increases when an employer is tracking a large workforce or pulling data from a variety of manual sources. When you manually calculate payroll, you run the risk of overpaying employees. When this happens, it is unlikely that the employee will volunteer the information. This means that your business is losing money for a simple miscalculation.
Employee Time Theft – While all people make mistakes, some people purposely lie about their time. “Buddy punching” is a common term that refers to an employee clocking in or out for another employee. This is only one part of a greater time theft issue, which is estimated to cost U.S. employers $400 billion a year. Think about it this way; if an employee “steals” just five minutes a day by leaving early, arriving late, or taking an extended lunch, it adds up to over 20 hours of unworked, but paid, time per every year. Biometric clocks are one option that can eliminate the possibility of buddy punching because employees must clock in and out using their own fingerprint.
Compliance Claims – As an employer, you carry the risk of compliance claims. For example, an employee could sue your company for unpaid wages by arguing that a manager changed their timesheet prior to processing payroll. Litigation is expensive. When you do not maintain a good digital paper trail on employee time, you make yourself more vulnerable to lawsuits and the costs that go with them.
Payroll Administration – If you are manually tracking time and processing payroll, you have probably discovered that it is a time consuming and expensive process. Many companies hire multiple employees to manage payroll. Payroll managers spend long hours collecting and organizing wage information, integrating pay rules, and distributing paychecks. When you make the decision to automate this process, you will save yourself and your company time and money, while also lessening the risk of errors.
Overtime – When you have employees working long hours, it is likely you will run into an overtime situation. That is why it is important to plan for overtime when considering your compensation and staffing strategies. While you may allow overtime, keep track of it. Unplanned or unchecked overtime hours can cost you dearly. Be sure to establish a strong overtime policy and ensure your employees stick to it.
Optimum’s Web-Based Time Keeping System
Optimum Employer Solutions, a Professional Employer Organization based in California, offers clients access to a web-based timekeeping system. This unique system seamlessly integrates with our payroll system and is included as part of that service. Several clocks are available for you to choose from, including biometric ones. When you make the choice to automate your employee’s time tracking process, you will find that you actually save money. You are less likely to run the risk of human error, time theft, compliance claims and more. Instead of spending countless hours adding up and double checking employee timecards, you can automate the process and finish it quickly and accurately.
Want more information?
The team at Optimum Employer Solutions understands how difficult it is to run a business. Human resource tasks, from payroll to training, can take up most of your time, leaving you to focus on administration instead of growing your business. The experts at Optimum are here to change this. We can handle the human resource tasks for you so you can focus on your business. Rather than working long hours and stressing over payroll and other administrative functions, let the team at Optimum Employer Solutions handle it for you.
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