Woodbury, NY - April 2, 2012
The benefits of automating time and attendance processing in businesses with hourly employees are obvious and many. From guaranteeing accurate calculations to reducing time theft to eliminating paper records, time accounting systems like LBi Time and Attendance are proven to reduce overall payroll expenses by as much as 8%, according to studies by the American Payroll Association (APA).
However, there is a misconception that such systems are far less beneficial when managing payroll processing in organizations with primarily exempt employees. Exempt employees don't punch a clock and generally are not mandated to work a standard 8 hour daily schedule. Indeed, many exempt employees work far more hours for the same pay. Therefore, payroll processing for these employees is primarily based on tracking exceptions, such as managing vacation and sick time. So where are the potential savings to be realized? Hard and soft dollar savings are certainly there.
In companies with larger workforces, timesheets are typically collected, reviewed and approved by department managers prior to being sent to the payroll department for final processing. The department head is frequently responsible for timesheet accuracy, while Payroll simply aggregates and transmits the data to the payroll system. Even with checks and balances in place it is entirely possible that errors (both unintentional and otherwise) can occur, potentially resulting in the company paying for unearned time off or time not actually worked.
For instance, managers are not always consistent in their employee time management responsibilities. One manager might be lenient in permitting employees to come in very late or leave early, or even record an unearned day off as a worked day. Other managers are known to "robo-sign" time sheets, simply trusting their employees without checking accuracy. Even though exempt employees are permitted more flexibility in managing their schedules than hourly employees, abuses can and do occur, and can cost the organization significantly if not checked. In some organizations these inconsistencies can lead to costly FLSA (Fair Labor Standards Act) disputes.
Another issue is the complexity in tracking FMLA (Family Medical Leave Act) policies. Employees seeking FMLA leave must have worked at least a certain number of hours in the previous 12 months in order to be eligible for this time off. If not tracked properly, companies could potentially provide employees with unearned FMLA time, which costs the organization in lost productivity. Additionally, the paperwork involved in processing the request (and subsequent return of the employee) must be managed properly or the organization could face costly legal problems. Comprehensive time and attendance systems can manage the entire FMLA process, ensuring employees receive the time off they are entitled to and all paperwork is processed according to the law.
In project oriented companies, workforce management systems can increase project/task reporting accuracy while speeding up data entry and processing. These systems can ensure that employees can only report time on projects for which they are assigned, and tasks that are applicable to the specific project, minimizing the need to make corrections later. This data can be integrated with both the company's payroll and project management systems to eliminate manual keypunching.
Typical time and attendance system deployments in organizations with exempt employees include time collection devices (i.e., badge and biometric clocks), primarily used to track workers that are on premises and therefore officially working for the day. "On Premises" reporting helps companies identify employees that are physically in the building if an emergency occurs, and can prevent legal problems if an employee claims a work related injury while not actually on-site. Additionally, though the actual in/out "punches" are not used for payroll processing, they are certainly beneficial when tracking patterns of attendance. Just by knowing the company is tracking this time, employees are encouraged to be on time consistently.
Unquestionably, automating time and attendance in ANY company will ultimately increase payroll accuracy, speed up processing, and minimize abuse, while vastly improving reporting, analytics and records keeping. Finally, employees will know that they are responsible for their performance under the watchful eyes of the company. In the end, both parties will benefit through greater productivity and cost savings.