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Time Clock System Articles
Best Practices for Using an Hours Tracking System to Avert Lawsuits
A time clock tracking system by itself will not enable a company to totally avert lawsuits. The way in which the company calculates the hours, manages the data and handles employee infractions will.
Some of the best practices when using a time clock system include:
Management of tracked hours:
Have a firm understanding where all the pay period time card files are stored. Sounds basic, right? You'd be surprised how un-retrievable this data is.
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 and get weak over time with no forewarned notice. 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. Time card files are not large and web backup is very affordable.
Document where the backups are. This not only helps for quick retrieval when queried by the labor board, but also helps if the system needs to be moved to another computer, 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 and that anyone can read this document, understand it and be able to follow 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.
Document hours collection procedures:
Organization is key when protecting a company from labor board audits.
Document the treatment of hours, policies regarding sick, vacation, time off, shift pay, types of shifts and more. This effort pays off when pleading a case. From this documentation, pay rules are reflected in the time clock system and calculated accordingly when collected.
Document employee notification of hours handling:
The employees using the time clock system need to be officially notified of how their hours 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 to the system.
Document penalties for infringement:
If the company doesn'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. A word of caution though, it is still the employee's word against the company's and nothing speaks louder in court than good documentation, firm hours calculation policies and good, easily retrievable records.
Documentation is also necessary regarding how penalties will be handled involving late/tardies, blind absences, and other infringements.
The company must be able to prove that the employees were notified about how infringements are handled. Acknowledgment signatures should be required on the printed hours tracking policies and include a short class to explain the policies. Providing clarification through question/answer sessions works best.
The company may want to get the employees to sign a printed copy of their timecard each pay period if scheduling permits as further proof of their agreement and acknowledgment of hours worked.
The majority of disputes from employees emanate from incorrect hours calculations or mishandling of edits to worked time. Make sure that the company hours tracking software is capable of tracking edits on the system. Make sure that the system can identify who made the edits (who was logged in as administrator?), when they made the edits and that there's an area where the editors can comment why they made the edits. Make sure there are reasons identifying various circumstances under which the company would allow an edit and have this spelled out in the hours handling policy. Why? So accountability also rests with the payroll administrator making the edits.
Being able to avert lawsuits and 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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