Consider this: An employee comes into work ten minutes late a few days a week, occasionally exceeds his/her given lunch break, and leaves the office a couple minutes early every other day. Over the course of the year, these additional (unworked) minutes add up to an entire week’s worth of pay. Now, let’s say they get paid $10 per hour for a 40-hour work week. If multiple employees are following suit with overstated time tendencies, the business owner is in turn paying out thousands of dollars of unworked labor per year. It may seem minimal on a week-to-week basis, but these inflated time cards can create a larger issue for the company’s bottom line.
In order to protect yourself and your business, it is important for business owners to be aware of the issues employees face in recording time and labor. Below are the three most common errors and best practices to follow in order to prevent them from occurring in your business:
The example mentioned above is a prime illustration of inflated time cards and exaggerated work hours. This is most commonly found if an employee’s hours are recorded through a paper time card or excel file. It can also occur with employees who clock out long after they have stopped working for the day. Lastly, this can become an issue if a company has a rounding policy set into place and employees purposely delay their punches to get more time than they actually worked.
If there is ever a concern regarding inflated time cards, managers can work on paying more attention to their employees’ records and completing thorough reviews of the time. Also, a time and labor system which tracks what time an employee clocks in and out can help avoid issues such as these.
When it comes to data that has to be copied from one format to another without a direct import, there is always the risk of human error or purposeful adjustment. Consider the task of retyping time cards and with the slightest slip of a key the “5” turns into an “8”. Or if a time card is being transcribed from written format into electronic, there can be a misinterpretation of a number or digit. Whether these issues have been changed by accident or on purpose, it can cost your business a lot of time and money to fix.
As a best practice to avoid issues with input errors, have multiple pairs of eyes look over the information before the payroll is submitted. Consider the use of a time and attendance system that directly imports data into your payroll system, this lowers your chance of error as well as creates an easy report to review.
Buddy punching may be one of the most common issues in regards to time and labor. If your employees are required to punch in/out each day, you may run into the issue of other employees stamping their friends’ time card before they have actually arrived or after they have departed. This can also apply if your employees clock in and out via a virtual time clock. Employees can share their login information and someone else can clock them in without actually being there.
A best practice for avoiding this is to implement hand or finger scans to make sure there is no one punching in for another person. Also have management review the time sheets and be aware of how many employees they actually have working at certain times of each day. Finally, for those employees who work off location, there are options to monitor punches based upon GPS recording. This way you know when and where an employee is clocking in from and can track it accordingly.
All in all, employee errors like these happen every day. It’s important to maintain control of your employees and the amount of labor your business is paying for. If you’d like more information on ways you can properly monitor the time and labor of your workforce, download the Time and Labor Management eBook below.
Photo Credit: Marcin Wichary