The Department of Labor is carefully watching companies on how they track time and attendance. There have been multiple lawsuits sweeping the nation focusing on companies that may not be paying their employees correctly. It can be due to new complex state laws, blended overtime rules, falsification of timesheets, split shifts, or documentation. When an employee challenges their employer on how they are being paid, it is up to the employer to prove they are paying correctly. Even if you are paying them correctly, there is always the chance that your documentation is not sufficient and this can open your company up to future attacks.
Paper Timesheets Can Put Your Company At Risk
More and more often, the Department of Labor is not accepting a handwritten timesheet as concrete documentation of hours worked. There is no date stamp or audit trail associated with a paper timesheet. If an employee was to accuse you of paying them incorrectly, you would have no way to prove that changes were not made to their timesheet. Therefore, companies are putting themselves at risk of a lawsuit if they are using paper timesheets.
Control Your Money
In July 2002, in the wake of Enron and Worldcom disasters, the government passed the Sarbanes-Oxley Act. This law focuses on how companies are reporting their finances and tracking money spent. Through the Sarbanes-Oxley Act, there are tighter. One of the biggest, if not the biggest, expenses a company can control is payroll. When demonstrating the payroll is being done accurately, the documentation trail needs to contain an audit tool that allows someone to see if data has been manipulated. This will protect both the employees and the company from fines or lawsuits. It's important to have dated documentation available to demonstrate that you are in control of where your money is going.
On one occasion, we received a phone call from an investigator who was working on a payroll fraud case. A married couple was being accused of adding hours to each other's timesheets electronically. Because they were using our automated time and attendance system, the investigator was able to go in and print-off an audit report. The report showed that, in fact, they had been going in and changing the timesheets. Just this one report, revealed a pattern of time being added on and who made the change. This is a serious violation of the law and can put everyone at risk.
Ready For An Audit?
If you have ever been through an audit, you know the work involved in sorting through mountains of paper you have to compile. By automating the time and attendance process, all of your historical data is stored in the database that can be pulled out with a simple report. The report will show you any changes that were made to timesheets, who made them, and what the original value was. This has been invaluable to companies that have suspected supervisors and managers of payroll fraud. The company owner was able to go in and run the audit report that showed supervisors adding hours not worked to an employee's timecards. This also puts the company at risk of lawsuits and Department of Labor fines!
Do It For Your Clients
Not only does automating your time and attendance help in protecting you from lawsuits and save you from tedious tasks, it will allow you to respond to your clients faster. If a client calls you and wants to view employee hours from a pay period two months ago, it could take you an hour or more. Instead of working on new business, you are digging through file cabinets for a piece of paper that you will then have to fax over to your client. If you have a Web-based time and attendance system, your client can actually login and view their employee's time historically. Thereby saving you a phone call and allowing you to move your company ahead faster.
Resources and Case Studies
There are many ways to protect your companies from lawsuits and fines. While there is no way to completely say you are safe from a lawsuit, there are steps you can take to protect yourself. Automating your time and attendance collection is a simple way to take a step towards protecting your company.
With so many laws being passed and updated all the time, we have put together a list of resources at www.TimeCentre.com/laws to assist in finding answers. Also on our website, you will find case studies, return on investment tools and more ways to save your company time and money.
Alex Ross is the Director of Marketing for TimeCentre, Inc. with over 10 years industry experience. He can be contacted at 866.722.5136, or by email at Alex@TimeCentre.com.
