Employment & Labor Insider

Last week, I wrote about a study describing how certain timekeeping systems could create wage and hour liability through, among other things, making it easy to "cheat" and providing no transparency when changes are made. (Which makes it impossible to detect and correct errors.) Having addressed the "problem" last week, I wanted to talk this week about solutions.

But before I do that, I want to mention one more "problem" raised by my law partner Zan Blue, head of our Nashville Office. Here's what Zan emailed me last Friday (I've edited very slightly):

My dear Ms. Shea— (Yes, that's the way Zan really talks)

Some employers use the auto deduct feature on the timekeeping systems. Seriously.

This feature, much like the “reply all” feature on email, should never have been created, and employers should never let it remain active.

Some employers let time sheets read “8-5” for every day. Some employers don’t even show the actual hours worked, just showing a series of “8” hours. Seriously.

Zan

Well said, Zan. Thank you. I was focused on less-obvious timekeeping issues, but automatic deductions, and use of a "paraphrased" work day instead of an actual work day, are huge problems for any employers who are still doing that.

Here are six timekeeping practices that employers can adopt to keep their risk of wage-hour liability as low as possible (realizing, of course, that there are no guarantees):

SIX TIMEKEEPING PRACTICES THAT REDUCE EMPLOYERS' RISK OF WAGE-HOUR LIABILITY 

No. 1: Consider using a timekeeping system that does not allow supervisors to edit time at all. This was the preference of the authors of the study. Instead of editing employees' time, the supervisor can either "accept" or "reject" the time entry (rejections should be made with an explanation), and the rejection is then sent back to the employee. The employee corrects and resubmits the entry himself or herself.

No. 2: Be transparent. Even if supervisors do edit employees' time, that should be fine as long as the original entries and each edit can be seen and tracked. That way, if an employer is involved in wage and hour litigation, the edits and the explanations for the edits will be reviewable. Not to mention correctable, if there is a mistake. (Needless to say, this is also very helpful information to have when the employer is conducting an internal wage and hour audit.)

No. 3: Keep employees informed of all changes to their time entries, and give them an opportunity to dispute the changes. Never leave employees out of the loop. As already noted, most changes are probably legitimate and legal, and the employee will concur. That in itself could be invaluable when you're defending a wage and hour lawsuit. In the rare cases in which the employee disagrees, it's better to air that immediately and come to a prompt resolution rather than to be blindsided by it two to three years later.

No. 4: If you want to "round" time, make sure there is no (or virtually no) net loss to your employees. You may need the help of a consultant and your employment counsel in determining how rounding will affect your employees' pay. Ideally, that analysis will be done before you start rounding. But even if you're already rounding, it won't hurt to make sure you aren't adversely affecting employees and -- if you are -- to adjust your policy and, if necessary, compensate the affected employees before there is a dispute.

No. 5: Train your supervisors (and employees)! Supervisors should be encouraging employees to enter their time completely and accurately. Be sure that your supervisors understand that they are never, ever to adjust an employee's actual time downward. If they believe an employee is working too many hours, they should address that as a disciplinary or performance issue, but they should still pay for the time.

It's also a good idea to make sure that the employees themselves understand that they are expected to post all time worked, with no exceptions. Especially in the salaried non-exempt world, employees often view themselves as "professionals" and may believe it is petty to report every call from the boss while driving in to work, or every work-related email after hours. Training and reinforcement can help eliminate this mind-set.

No. 6: Zan is the man. If you are automatically making deductions for breaks or meal periods, you could have a problem because it's very likely that many of these "breaks" were not actually taken. If not, then you owe the employee for the time. It's also possible that employees will mistakenly or falsely claim they worked during the "break" when they did not. How will you prove them wrong? Do not allow employees to "paraphrase" their time as a standardized "8 to 5" or "9 to 5," but require entry of actual starting and quitting times (and actual break times). Don't ever allow employees to simply post the total number of hours they worked.