Many companies are still using antiquated timekeeping systems to record their employees’ work hours. Although older systems like manual timekeeping, may seem to work, they can seriously hurt your bottom line. Without automated timekeeping systems, there is no way of knowing when your employees are actually working. Although your records may say they arrived at 8 am, how do you know their coworker did not just sign them in early? Manual timekeeping also inevitably leads to human error. Even the most detail-oriented person will eventually make a mistake, and that error can leave your company vulnerable to expensive fines from the DOL or IRS.
Accurate timekeeping is vital if you want to protect your business from federal penalties. The Department of Labor has been cracking down on wage and hour violations in recent years, dishing out millions of dollars in fines to companies with inaccuracies in overtime and pre-shift activity timekeeping. But the DOL is not the only federal agency that will penalize you for subpar timekeeping. IRS audits can also impose fines on companies that have made timekeeping mistakes. When a business is audited by the IRS or DOL, even minor discrepancies could lead to significant fines.
Paying the correct wage and overtime is incredibly important in any business. Inconsistent pay can cause morale issues amongst your employees and even drive away diligent workers. Timekeeping inaccuracies could also hurt your profits, as you might accidentally pay employees for hours they did not work. On the other hand, underpaying employees could be construed as a violation of the Fair Labor Standards Act (FLSA). If you are found to be noncompliant with FLSA regulations you will have to pay all back wages owed as well as any fines FLSA decides to impose upon your company.
Lackluster timekeeping can also leave your company open to potential time theft from employees. The most common form of time theft is known as “buddy punching”. This is when one of your employees asks a coworker to clock them in or out after they have left or when they are taking a longer break than is allowed. Usually, employees engaging in buddy punching will do so in small increments, tweaking their times by five to ten minutes each day so their changes are not too noticeable. However, minutes of unworked time can quickly add up and turn into hours or even days over several months. In the long run, time theft can seriously add up and significantly cost your company.
Are you feeling overwhelmed when it comes to managing timekeeping and administrative-related tasks for your small business? OEM America can help. For decades, we have been helping companies across Connecticut and throughout the country transform their businesses into the pinnacle of efficiency.
Through the use of our time-proven model for managing employees, you can cut costs and decrease your turnover rate in no time. Stop worrying about Human Resources, employee administration, and benefits management. Leave all of that to us! With OEM as your human resource management team, you can focus more on the high-payoff activities that help you grow and profit.
Contact us for a free consultation today!