Posted on 31-Jul-09 by The Timekeeper

Did you know? According to a recent survey of retailers by AMR Research, the average fine imposed for noncompliance with labor laws and collective bargaining agreements is $250,000? And that over half of the survey respondents reported having been found out of compliance during the past 12 months?

Wow. Just wow. A quarter of a million dollars. Takes a lot of sales to make up a quarter of a million in profit.

Then you add in the non-financial “costs” of losing a big wage and hour lawsuit — damage to your company’s reputation, low employee morale, increased turnover… Not complying with labor laws can be very expensive, indeed.

The survey also said companies report saving an average of 3.5% of their payroll costs by implementing a “workforce management solution.”

So, which would you rather have: a public- and employee-relations mess and a quarter million dollar fine, or a 3.5% reduction in your payroll costs (without having to lay anybody off or cut anybody’s pay)? I know what my answer would be…

One more bit: Almost half of those responding (47%) reported they’d received complaints from employees about time and attendance data. What do you want to bet these complaints played a large part in at least some of those wage-and-hour lawsuits? Add in those employees who don’t complain to their company, but instead take their complaints straight to the DOL or their state labor board, and it’s easy to see how over half the companies responding could have found themselves under investigation for possible violations. (What it doesn’t explain, though, is how over half of them could have been found to be in actual non-compliance with those laws and collective bargaining agreements. Hmmmm.)

(As an aside: I suspect those sorts of time-and-attendance complaints — and actual cases of non-compliance — would be fewer in companies using, for instance, automated biometric time tracking systems, where the employee has to be physically present in order to clock in or out, and in companies where the employees review and agree to their own time records before they are processed for payroll. I would further guess complaints would be higher in companies that use more manual time and attendance tracking — or who don’t formally record time worked at all and rely instead on estimates and guesswork — and/or where management is permitted to change time records without employee input or knowledge.)

So, what is your company doing to avoid employee complaints about time and attendance? How do you mitigate the risks of being hit with a big fine for wage and hour non-compliance?

HT to Kronos for bringing these survey results to my attention!

Be Sociable, Share!

• 

No Comments

No comments yet.

Comments RSS TrackBack Identifier URI

Leave a comment