COVID-19 has changed how small businesses operate, from applying for relief such as the Paycheck Protection Program (PPP) to updating payroll processes. Payroll—comprised of complex processes including garnishments and unemployment claims, payroll taxes, and classifying workers—doesn’t have to be confusing. By understanding payroll changes, payroll technology, and the ebb and flow of time and attendance, you can improve and simplify your payroll processes. WeWork Business Solutions, powered by VensureHR makes professional services simple, so you can revitalize your small business during this time.
As COVID-19 has forced many businesses to shift to working remotely, digital time and attendance tracking are even more essential in making sure businesses are tracking accurately. Technology makes it simple for business owners to keep track of employees’ workdays, ultimately streamlining the payroll process.
What time-tracking software can do
Time-tracking software provides business owners with essential business abilities, including timekeeping, data management, and process gap analysis. The more a business owner can lean on this technology, the more they can direct their attention to more pressing concerns.
It handles timekeeping essentials
Many businesses require employees to clock in and out for their scheduled shifts, including rest and meal breaks, for payroll and compliance purposes. Timekeeping software allows employers to easily track hours worked and provides a formal record to audit employees clocking in early or skipping breaks. Under federal law, meal periods—usually 30 minutes or longer—are not considered compensable work time (though 22 U.S. states and territories have additional rest and meal break regulations). Avoiding the inflated labor cost from employees paid for time not worked is the main purpose of timekeeping.
It accurately manages data
Time-tracking software offers a reliable way to securely manage data for accurate record-keeping and reporting capabilities, plus prompt access to information across different devices (e.g., mobile, desktop computer, tablet) and departments (e.g., payroll, unemployment, taxes, claims, etc.).
It offers opportunities to grow
Automated time-tracking software saves time and effort for managers, human resources, and payroll teams. This allows them to focus on revenue-generating tasks, such as boosting personnel management and human capital growth.
It automates schedule management
Tracking in real time can provide business operations insight, such as forecasting to avoid overstaffing or overtime, both of which can significantly affect a company’s labor budget. Typically, time-tracking software includes schedule management to prevent last-minute requests for time off, decreasing employee absences, and minimizing the financial and operational impacts of absenteeism.
How time-tracking software benefits businesses
Time and attendance software provides many useful business benefits and capabilities, such as paid time off and sick leave tracking, overtime monitoring, mobile accessibility, and reporting.
Paid time off (PTO) and sick leave tracking
Businesses that invest in employee paid time off may calculate employees’ allotted time off based on hours worked and/or accrued. Time-tracking software can provide clean, reliable hours worked, PTO accrued, and PTO hours used, ensuring that calculations are correct and paid on time.
This can also provide greater insight into PTO utilization, ways to encourage employees to use PTO, and other PTO benefits that may be useful, such as rollover of hours, limitations for use (e.g., breaking out sick leave, vacation, and personal leave as separate PTO vs. lumping it under one PTO umbrella).
Time-tracking software can also calculate hours to determine an employee’s eligibility for the federal Family and Medical Leave Act (FMLA) benefits. There are state-by-state family medical leave law resources available to review and guarantee compliance within your state of business.
Almost all non-exempt employees who work more than 40 hours a workweek are eligible for overtime compensation. The federal overtime rule, as provided by the Fair Labor Standards Act (FLSA), requires:
- Employees who exceed 40 hours in a workweek must receive overtime pay that is 1.5 times their standard pay rate
- Bonus payments must be included in the employee’s regular rate of pay in calculating overtime
- Work performed on Saturdays, Sundays, holidays, or days of rest does not require overtime pay unless overtime hours are worked on such days
- Additional payment for work performed on weekends or night shifts is solely dependent on the employer-employee agreement. The FLSA does not require extra or double pay for such work.
State-specific wage and hour rules may provide additional regulations to the federal overtime rule. With time-tracking software in place, keeping track of overtime will be easier, especially as regulations shift.
Mobile accessibility and management
Accessibility and data management can allow employees to refocus on their job responsibilities. For example, instead of manually filling out time-tracking forms or managers having to double-check accuracy, digital time-tracking software removes the manual process, resulting in increased employee productivity and eliminating employee stress about inaccurate, inconsistent paychecks. With the stress of being paid accurately and on time alleviated, employee job satisfaction and morale may improve.
As many businesses have incorporated remote work options due to COVID-19, the mobile or remote accessibility capabilities of time and attendance software may streamline corrections, approvals, and reporting on productivity for managers.
Fraud and security
Businesses can enhance time-keeping security by utilizing a time tracking software that integrates biometric technology. Biometric technology delivers substantial improvements to business efficiencies by restricting employee access to areas where sensitive company and employee information is stored, implementing Wi-Fi enabled time clocks, and monitoring employees entering and exiting the office.
An automated system reduces security risks of unauthorized users and prevents “buddy punching,” where a non-exempt employee records the time of a coworker not currently present, which is a form of time theft. For example, some time and attendance programs have GPS location tracking and IP address recognition features that allow employers to hold employees accountable for time theft.
Under the Affordable Care Act (ACA), employers are federally mandated to provide health coverage or penalty payments for companies with a minimum of 50 full-time employees (or full-time equivalent (FTE) employees). Time and attendance programs can track and ensure ACA compliance.
These programs do more than just track hours worked; they can generate reports providing insights into business operations and employee habits. For example, you may track whether employees are clocking in late, on which device (e.g., mobile vs. desktop computer) they’re clocking in, and determine strategies that help align employees with company policies and proper adjustments to employee schedules or behaviors if needed.
Small businesses can especially benefit from a time and attendance system. A federal tax credit of 50 percent of health insurance premiums you contribute for your employees is available. Credit eligibility is determined by the number of full-time and full-time-equivalent employees based on hours worked.
As technology becomes more predominant in business operations, companies need to adapt quickly. One way to do so is by ensuring you have the proper technology and an understanding of how to use it to elevate your business’s efficiency. Explore WeWork Business Solutions, powered by VensureHR for additional time and attendance and other payroll services.
Lizz Morse is a marketing and communications supervisor at Vensure Employer Services. She holds a master of psychology from Grand Canyon University and has been published in Attorney at Law Magazine, Real Estate Agent Magazine, and The Good Men Project, among others. Morse has also ghostwritten a number of articles focused on small business administration and operations, appearing in publications such as Thrive Global and Small Biz Daily.