Repeat after me. Unicorns are NOT real. Unicorns are mythical creatures.
What a tumultuous year 2014 was! Across the world, we saw companies slowly emerging from the depths of a widespread recession. Many organizations changed or reworked internal processes to improve their efficiency and productivity. Compliance requirements are now more onerous than ever, as organizations must follow new regulations such as the Affordable Care Act, as well as changes in the Fair Labor Standards Act (FLSA). A growing number of cities and states across the US are now mandating paid time off for sick leaves. Along with these, factors such as minimum wage increases in several states, stepped up Department of Labor audits, and an ever more mobile workforce, will combine to keep business managers looking for better ways to deal with the additional regulatory complexities.
Let’s take a look at some of the major new regulations—and updates to existing ones—that will affect how businesses manage their workforce in 2015:
Minimum wage increases
In the United States, several states raised the minimum hourly wage, while the Senate deadlocked on raising the federal minimum wage to approximately $10 over a two year period. This will lead to higher labor costs for most employers covered by the FLSA. On the other hand, proponents say that it’s about time the minimum wage kept up with inflation. With the cost of labor going up, it becomes even more important to track employees’ working hours. New “Predictability Pay” regulations that recently came into force in San Francisco will require employers in that city to be cognizant of the way they schedule their employees’ work hours. Organizations must find ways to improve productivity and employee scheduling under these new regulations.
Increased DoL audits
The Department of Labor has increased its pace of hiring of investigators, in line with greater scrutiny of FLSA wage and hour violations. In 2012 alone, the DoL levied more than $280 million in unpaid back wages for over 308,000 employees. In 2013, Tyson Foods was ordered to pay nearly $5 million to settle an unpaid wages and overtime class action lawsuit. In 2014, LinkedIn settled a class action lawsuit by paying retroactive overtime wages and damages to the tune of ~$6 million.
According to a NERA Economic Consulting Report, over $2.95 billion was paid out by companies to settle wage and hour disputes in the last 7 years alone. In 2013, an average settlement of $4.5 million was paid by companies to resolve compliance related cases. Businesses can ill afford to be hit with such penalties, as the burden of proof lies completely upon an employer to comply with FLSA regulations. Clearly, organizations need to step up their oversight of compliance regulations to avoid expensive and harmful litigation.
The Affordable Care Act (ACA)
Also known as Obamacare, the Act requires businesses with over 100 full-time equivalent employees (FTE) to provide them with affordable healthcare insurance. At present, FTEs working on average more than 30 hours per week come under the provisions of this law. Some organizations plan to minimize the effect of the ACA on their business by limiting the number of employees working more than 30 hours a week. This, of course, requires them to more accurately track work hours to find out who is covered under the ACA.
Mandatory paid time offs
Several cities and states are starting to expand on the mandated time offs already provided by the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act (ADA), military leave, workers’ comp, and jury duty, paternity and maternity leaves, among others. In Connecticut, paid sick leave became mandatory for companies with over 50 employees. In California, exempt and non-exempt employees who work in that state for 30 days or more annually are entitled to paid sick leave. In Massachusetts, employers with eleven or more employees will be required to provide them with paid sick leave.
Crucial variations in such laws between cities and states make time and attendance tracking with local, national, and even international work rules support all the more critical for many public and private organizations. Factor in the complex reporting requirements mandated by the Sarbanes-Oxley Act (SOX), which include time off liabilities, and the complications keep mounting for covered organizations.
A mobile workforce
An ever increasing number of people will telecommute and get work done on smartphones and laptops, reflecting the hectic pace of globalization and business today. A growing number of workers will engage in work-related travel, often across states and continents. Time reporting and tracking through dedicated smartphone apps will become ever more necessary—and indispensable. On the government side, the Telework Improvements Act of 2010 encouraged U.S. agencies to offer teleworking as a viable option to their employees, to improve continuity of operations, promote management effectiveness, and improve work-life balance. These factors will challenge HR and Payroll managers to take a growing pool of diverse compliance regulations into account.
What can companies do to comply with these new regulations in the business environment? Not just the ones mentioned here, but upcoming regulations on the horizon as well.
Good workforce management begins with good time tracking. It is increasingly becoming the first process that is looked into and upgraded. An automated time tracking solution is a crucial component in any business, giving managers better insight into their workforce, while contributing to a culture of compliance. A system that can provide a comprehensive audit trail in the event of a DoL audit can pay for itself many times over in litigation avoided.
Time tracking solutions that simplify and streamline processes will be an integral part of today’s workforce trends. Employee time tracking featuring iBeacon integration will help companies and employers alike streamline the entire process, and even help account for time spent by employees on breaks, and donning and doffing of work uniforms, for example. Powerful compliance libraries built into time and attendance tracking will help organizations improve productivity, increase profits, and stay compliant—today and in the future.
Have a great 2015!