Workforce Management: New Survey Determines Organizations Not Prepared to Manage Compliance

Livonia, MI, May 17, 2007 --(PR.com)-- A recent survey on compliance preparedness and workforce management best practices revealed that many organizations are not as prepared as they should be for the Fair Labor Standards Act (FLSA), Family Medical Leave Act (FMLA), and Sarbanes Oxley (SOX). Whether organizations are manually tracking the information, automating the data collection, or feel like they are meeting the requirement's status quo, employers need to recognize the importance of following the regulations.

Between the Department of Labor (DOL) penalties, state wage laws, employee lawsuits, etc., non-compliance can be costly for organizations. In 2006, non-compliance resulted in nearly $7.9 million in civil money penalties, the DOL recovered more than $171.5 million in back wages for 246,000 employees, and employers paid another $2.9 million from FLSA penalties.

Of the survey respondents, 75-percent rated their pay rules as ‘moderately complex’ to ‘very complex,’ with only 34-percent having a time and labor system to manage the process, and 68-percent having no system to manage compliance. Furthermore, 91-percent of the organizations surveyed ranked their ability to manage compliance as ‘good’ to ‘excellent,’ yet the U. S. Department of Labor (DOL) statistics show 48-percent of companies audited failed to comply with Federal labor laws. Evidently, there is a disconnect between the expectations and the facts.

Survey results show the organizations that use time and labor systems are in a better position to manage compliance than organizations that handle the job manually. The survey found 42-percent of the organizations with time and labor software reported excellent compliance compared to only 32-percent not using a time and labor system. In addition, only 12-percent of organizations without time and attendance software rated their compliance ability as excellent – while 37-percent of organizations with a time and attendance system rated compliance as excellent.

Time and attendance software can easily automate compliance if the system is set up correctly. Whether the system is set up by consultants or someone in-house, the person needs to understand the rules and the data that needs to be collected, tracked, and maintained to meet regulations. Organizations with ‘moderately complex’ to ‘very complex’ pay rules see a high return on investment (ROI) when licensing time and attendance software; the system records accurate timekeeping, gathers pre-defined criteria, supports union rules and contracts, supports retroactive pay, keeps an audit trail, and more to support employers.

Organizations surveyed shared compliance best practices and the results show:

- 51-percent using time and attendance software for retroactive pay adjustments report excellent compliance compared to only 37-percent who do not use software.
- 46-percent of organizations using web-based time and attendance report excellent compliance compared with only 36-percent that do not use web-based software.
- Organizations using time and attendance software to track FMLA requests are six-percent more likely to report excellent compliance than those who do not track FMLA requests.

Based on the survey results, it looks like organizations feel that managing compliance is a priority and more than a third are looking to buy or upgrade software over the next twelve months to accomplish this.

There are several compliance regulations for employers: FLSA, FMLA, and SOX. The first hurdle is understanding the regulations and how to manage compliance – time and labor systems automate and manage compliance. Time and labor systems have the functionality to manage FLSA requirements, such as accurately track employees’ work hours for non-exempt employees, and manage overtime pay and labor laws. The ability to automate retroactive pay adjustments for non-discretionary bonuses and overtime pay is key to employers, because there are many FLSA rules associated with this process. Automating FLSA compliance saves employers money in penalties and employee time; employees can spend many workdays trying to manage compliance manually.

By automating the attendance process and monitoring conditions that can alert managers of possible FMLA scenarios while they are developing, the time and labor system helps organizations lower absence costs, simplify the management of these events, and ensure the employee receives the appropriate amount of time available – all ensuring the employer is in compliance.

Time and labor systems can eliminate the most common and largest source of payroll related mistakes to help employers comply with the Section 404 requirements of SOX by automating pay calculations and providing front-line managers with access to timesheets, leave requests and adjustments.

Interestingly, the survey results stated that a majority of organizations felt like they were in compliance, but the detailed results of the survey revealed that was not necessarily the case. Although many organizations that have a designated system in place to meet these objectives, such as a time and labor system, are managing complex rules much easier. The overall trends of the survey suggest:

- Time and attendance software significantly helps organizations manage FLSA compliance and union rules.
- Using advanced features of a time and attendance software, such as retroactive pay adjustments, web interface, and tracking FMLA requests, helps organizations manage FLSA compliance and union rules.
- Employee self-service features allow employees to catch errors in real-time to improve FLSA compliance and union rule management.

Get a copy of the Workforce Management Research Report to see how you compare to your peers. Register today at:

http://www.workforcesoftware.com/resources/research_report_reg.html

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