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Time Clock System Best Practices
A time tracking system by itself will not enable a company to totally avert lawsuits BUT the way in which you handle the hours and manage the data will.
Some of the best practices I can suggest when using a time clock system include:
Management of tracked hours collected-
Have a firm understanding where all the pay period time files are stored.
Use a backup system that backs up locally (within the facility) AND off site (via the web). Keeping backup tapes in the CFO's car or in the HR director's house doesn't count! Backup tapes are a bad idea in general because they are SLOW. External drives and other digital media is preferable. This may seem like an expense but you need to consider that fines levied by the labor board for not producing this information in a timely fashion ramp quickly. Hours files are not large and web backup is very affordable.
Document how to get to the backups for reference. This not only helps when queried by the labor board, but also when you get a new computer and need to move the system over or if the PC the system resides on gets a virus or dies.
Create an official policy to ensure that you have a solid backup regimen in place to save these files and that anyone can read this and understand it.
Make sure payroll personnel are well versed in accessing previous time period records. Practice going back and reviewing previous pay periods REGULARLY. Test your payroll personnel on this. Human nature has it that everyone's always too busy to review procedure. This is an expensive mistake.
Documenting hours collection procedures-
Organization is key when protecting the company from labor board audits.
Document the treatment of hours, policies regarding sick, vacation, time off, shift pay, types of shifts and more all pays off when pleading a case.
From this documentation, these pay rules are reflected in the time clock system and calculated accordingly when collected.
Documenting employee notification of hours handling-
The employees being tracked need to be officially notified of how the hours they work are being calculated. It is best to create a document that explains this and have them sign it when the system is put in AND every time there is a change.
Documentation of penalties for infringement
If you don't use a system that keeps employees from being able to cheat on their time, it is best to have a public policy stating the penalties for such.
Documentation is also necessary regarding how penalties will be handled involving late/tardies, absences, and other infringements.
You must be able to prove that the employees were notified about how infringements are handled. Signatures on the printed hours tracking policies plus a short class to explain the policies (thus proving clarification through question/answer sessions) works best. You may even want to get the employees to sign a printed copy of their timecard each pay period if scheduling permits.
The majority of disputes from employees emanate from incorrect hours calculations or mishandling of edits to worked time. Make sure that your hours tracking software is capable of tracing edits on the system. Make sure that the system can identify who made the edits, when they made the edits and that there's an area where the editor can comment why they made the edits. Make sure you have reasons identifying various circumstances under which the company would allow an edit and have this spelled out in the hours handling policy. Why? So the accountability also rests with the payroll admin making the edits.
Being able to respond quickly to labor board inquiries is key just as much as being able to prove cohesive policies and procedures are in place to handle all types of circumstances affecting hours collection and calculations.
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