Payroll Time Clocks Help Prevent Errors
Under the Fair Labor Standards Act, employers are required to maintain updated records of the hours worked by nonexempt employees. According to the FLSA, employers are also expected to pay nonexempt employees for all the hours they work. As such, it is of utmost importance that employers ensure accurate timekeeping and payroll processes as part of their business operations.
However, if you’re separating your timekeeping and payroll processes by implementing two different technologies, you may be increasing your risk of making unintentional yet impactful payroll errors. A much better approach is to integrate software that has the ability to manage both timekeeping and payroll.
“Organizations using a solution that has both timekeeping and payroll capabilities were 44% more likely to have a payroll error rate at 2% or less,” says an article published on the American Payroll Association’s website. What’s more, it is said that organizations that implement both timekeeping and payroll surpassed their target revenue values by 7%.
Below are four ways that integrating timekeeping with payroll can prevent or minimize payroll errors.
1. Transports employees’ time into the payroll module
A stand-alone timekeeping system captures employees’ time in that system alone. To pay employees, you must then manually enter their timekeeping information into the payroll system. This drastically raises the risk of data entry mistakes.
An integrated time clock system shortens the process by capturing employees’ time, allowing managers to make the necessary edits and then transporting the approved time into the payroll module. This can vastly reduce the time you spend on data entry, which also minimizes your risk of making errors.
2. Improves payroll accuracy in many areas
Integrating timekeeping and payroll bolsters accuracy in these areas:
- Gross pay calculation, including hours worked and paid time off.
- Mandatory paycheck deductions, such as payroll taxes and wage garnishments.
- Voluntary paycheck deductions regarding health insurance and 401(k)s.
- Payroll tax deposits and reporting to federal, state, and local agencies.
- Timekeeping and payroll reconciliation to ensure accurate financial statements.
- Easy access to timekeeping and payroll reports to enhance decision-making.
3. A payroll time clock gives you more time to focus on strategic tasks
An integrated timekeeping system can save you a lot of time, leaving you more hours in the day to prioritize payroll and focus on strategizing your payroll procedures in ways that reduce the likelihood of payroll errors.
There are many ways to be strategic:
- Implement payroll audits to uncover payroll system strengths and weaknesses.
- Set up payroll internal controls to tighten payroll security and reduce fraud.
- Apply payroll best practices across interrelated departments, such as HR and finance.
- Monitor time, labor, wages, and overtime to stay within your payroll budget.
- Establish more accurate or cost-effective ways to manage payroll, such as outsourcing.
4. Keeps you out of the government’s crosshairs
The regulations regarding both timekeeping and payroll are usually susceptible to change, meaning the rules that you must abide by one day might be different the next day, and sometimes, this can happen with little to no notice. Additionally, brand new rules and regulations are continually in the works at the federal, state, and local levels.
This is important to remember because failure to comply with said rules and regulations may result in significant penalties imposed on you by the government. However, integrating your timekeeping and payroll processes can help you meet your legal obligations while completely avoiding unwanted and expensive penalties.
Interested in using an integrated payroll time clock?
We can help you save time while keeping track of time. Feel free to call Atlantic Payroll Partners today at 772-466-0440 to learn more about our payroll time clock solution.
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Benefits of Biometric Time Clocks
Benefits of Biometric Time clocks
Time theft reportedly costs U.S. employers over $400 billion yearly in lost productivity. Further, in a survey by Software Advice, 43% of hourly workers admitted “to exaggerating the amount of time they work during their shifts.”
To prevent time theft, employers are utilizing biometric time clocks. According to the Software Advice survey, biometric time clocks seem to be the best way to prevent time theft, as only 3% of employees report stealing time via that method.
Biometric Time Clocks
A biometric time clock records an employee’s time based on biological identifiers that are unique to that employee. These identifiers may include:
- Fingerprints.
- Retina or iris scans.
- Hand or face geometry scans.
- Voiceprints.
Biometric time clocks eliminate “buddy punching,” which is a leading cause of time theft. “Buddy punching” is the term used to describe an employee clocking in or out for a co-worker. With a biometric time clock, this fraudulent scheme is a nonstarter.
Still, employers that utilize biometric time clocks should be aware of applicable laws.
Biometric Time Clock Laws
Several states — specifically, Illinois, Texas, Washington and New York — have enacted laws regarding the use of biometric information. Other states, including Arizona and Florida, have introduced legislation to regulate biometric data use.
The specifics of current and proposed laws vary. However, from an employment perspective, the laws generally require one or more of the following:
- Employers must obtain employees’ consent before collecting their biometric data.
- Employers must notify employees that their information is being collected and explain how the data is being applied.
- Employers cannot sell, lease, trade or profit from employees’ biometric information.
- Employers must abide by confidentiality, retention and disposal rules if the biometrics data is no longer needed.
Whereas the statutes for Illinois and Texas are broadly applicable to employers, Washington’s protections are limited to data stored for commercial (rather than employment) purposes. As noted by the law firm Littler, Washington’s “law does not apply to an employer’s use of a biometric time clock as part of a timekeeping system.” While employers in Washington are free to use biometric time clocks, they cannot sell or profit from the biometric data or include hand or face geometry scans as biometric identifiers.
New York’s biometric provision focuses primarily on fingerprinting. Employers in New York cannot require employees to use their fingerprint to clock in and out, nor can they take adverse action against employees who refuse to do so. Employers can, however, use a fingerprint biometric time clock on a voluntary basis. Moreover, they can use a biometric time clock that does not scan the surface of the hand or fingers.
Noncompliance Penalty
The state may impose penalties on employers that violate biometric data laws. For example, the penalty in Illinois ranges from $1,000 to $5,000 per violation plus attorney fees.
If you decide to implement a biometric timekeeping system, make sure you’re on legally sound ground.
Why Atlantic Payroll Partners
The biggest payroll companies probably won’t have time for your business. It’s that simple, you’ll be a number. At Atlantic Payroll Partners, you’ll be the opposite. We’ll know more than your name; we’ll know the names of your children and their birthday’s as well. We will know you.
We’ve been helping Florida business by managing their payroll and providing workers' compensation quotes for ten years. We help keep payroll cost affordable by provided transparent PEO payroll quotes that allow you to plan your budget accordingly. Like the big payroll companies, you can manage your payroll and payroll timekeeping with us, while reaping the benefits of PEO risk management.
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