All businesses have some rules about the way they pay employees. After all, that’s what awards and workplace agreements are all about aren’t they?
To some degree this is correct. However, when it comes to introducing employee time clocks or time and attendance systems there are some things that are not defined in workplace agreements or awards.
It is therefore important to clarify here that time clocks and award interpretation is a process which translates employee attendance times to a calculation of the amount of hours an employee is to be paid for. Those hours may translate further into normal hours, or overtime or penalty hours. Equally important is that time clocks and time attendance is all about hours and has little to do with actual pay rates. The monetary value attached to the hours worked is a payroll function and is almost exclusive handled manually or by your payroll software.
Generally, employees are paid in relation to the amount of hours worked but often employees are paid salaries and a time and attendance system is simply used to monitor whether employees are working their nominal minimum hours.
Most time clocks are very limited in their ability to calculate employee attendance unless the rules by which their payroll hours are calculated are very simple.
For example: In Company A the employees work anything from 4 to 12 hours per day with an unpaid lunch break and do not receive overtime of penalty rates.
To manage this scenario you would need to ensure that employees clocked on immediately before they start work and clocked off for lunch, back on again after lunch and then clocked off immediately after they finished work for the day. In this situation most time clocks would be capable of calculating the hours and minutes the employee worked for the day. Furthermore some would be able to calculate the payroll hours for the week. However, as soon as we introduce the requirement to deal with any of the scenarios listed below we have to consider a more advanced time clock or award interpretation software.
Specific Start and Finish Times:– If your employees have specific start and finish times it is simply not possible for them to clock on exactly at the start and finish of the shift. This means that a simple time clock will record the employee as clocking in a few minutes or more earlier than the start of the shift and a few minutes or more later than the end of the shift. Your basic calculations of employee hours will now be marginally incorrect and you will have to manually “round” them to the start and end time of the shift.
Overtime Rules :– If your employees are paid overtime the time clock must be able to incorporate some rules where by it understands the normal time hours per day and separates those hours from hours worked in excess of the normal time. It may also need to categorise time and a half and double time and report them separately.
Balancing: – This is an added degree of difficulty related to overtime. Balancing involves taking hours worked after an employee’s scheduled finish time (overtime) and filling out any shortfall in their normal time hours. In simple terms…you don’t want to pay your employees overtime if they haven’t worked all their normal time. Balancing may apply daily, or weekly.
These are the basic areas where time clocks as a standalone solution without award interpretation software, suffer limitations. These limitations may not be an issue in your business but it is important to be clear on what you would like the time clock to do and so ensure that your supplier can meet your application requirements. Otherwise you may find yourself with a time clock that calculates payroll hours incorrectly and is more trouble than it is worth.
Time & Attendance