Navigating Labor Compliance Hazards

The single largest line item for most employers is payrelated costs (typically between 40% and 60% of most HR budgets). The American Payroll Association (APA) estimates that having a manual time tracking process introduces human errors that can directly cost organizations 1% – 8% of their payroll. These errors in tracking time not only directly affect employees’ paychecks, but they are also a potential ticking bomb when it comes to compliance risks.

Organizations are therefore under a lot of pressure to properly comply with regulatory requirements — such as SOX Section 404 which mandates financial reporting accuracy, or the FLSA which prescribes standards for minimum wages, overtime pay, and record keeping — and many find it difficult and time-intensive to produce the proper documentation without automated processes.

Replicon can help these organizations streamline and automate their time tracking process, reduce any errors that may creep in, and provide necessary visibility and reporting, thus reducing the risk of non-compliance. Replicon TimeAttend and CloudClock offer a great number of benefits, such as:

Managing overtime correctly is critical to be in compliance with FLSA regulations. According to statistics by the U.S Department of Labor (DoL), having to pay back wages for overtime violations represent 88% of all FLSA violations. Unplanned absences can also throw a wrench into schedules and force employees to work overtime, thus stretching an organization’s resources. In addition, managing meal breaks, rounding rules, and other organization-specific policies are important in the mission to stay compliant. If time off is not managed accurately, it can affect productivity and cost firms up to 3% – 15% of their total operating costs.

A good workforce management solution can be the answer to all of these challenges by helping to ensure compliance and providing real-time visibility into overtime, time off, and other policy uses and abuses. With the Replicon cloud-based Time and Attendance Management solution, a configurable rules engine can easily accommodate policy variations by department or geography without the need for custom programming, unlike most other traditional enterprise solutions out there.

Employee classification You can use pre-defined employee types — like full-time hourly, part-time salaried, and contractor — or add new employee types to be assigned to employees for payroll, time tracking, and reporting purposes.

Attendance rules You can determine when users are to be considered absent, late, early out, or early in, based on the times they punch in and out. Violations of attendance rules are flagged for the supervisor to take necessary action.

Overtime policies Create and administer overtime policies or enforce company specific policies with ease. Organizations can seamlessly automate local, province, state, or country specific overtime rules and apply each of these rules at department, group, or individual employee level. They can also track overtime as well as regular hours to automate all pay calculations.

Meal breaks: Create break rules to determine whether employees are entitled to breaks during their shift, when they must take those breaks, and how long those breaks must be. There can be defined penalties to consider if your organization fails to give an employee a legislated meal break, such as additional pay requirements, for example.

Rounding rules: Easily determine how increments of paid in-and-out punch times are rounded. For example, you can define rounding rules to pay employees only for certain designated fractions of an hour worked.

Time off policies: Using the time off capabilities in the solution, organizations can easily create different time off types as well as set accruals, and reset and carry forward policies specific to their company. Employees are empowered to submit time off requests and review balances and accrual data without burdening HR or their supervisors.

Robust reporting: Our robust reporting capabilities help organizations gain much needed visibility into their attendance, overtime, time off, and compliance data without breaking a sweat.

Another important compliance requirement is having proper approval and storage mechanisms in place so that time — including hours worked, time off taken, pay rates, straight pay, and overtime earnings, among other fields — is recorded, reviewed, authorized, and stored for future audits, if needed. Employers need to be sure to keep detailed records of all of this information, and some of this data is required to be kept for three years or more. If organizations rely on a manual process for tracking time, however, the effort that would go into collecting time records for the last several years would be unfeasible — and most likely result in an unfavorable judicial decision.

With Replicon, organizations can get approval policies in place and manage their time records effectively so that they can face any audits with confidence:

Simply put, Replicon’s Time and Attendance management solution helps organizations to be better prepared to comply with today’s complex laws and regulations*. Automated processes assist businesses of all sizes and industries to track time accurately, reduce errors, improve financial reporting accuracy, and manage compliance risks.

With Replicon, organizations can: