Are you paying your employee correctly ?

Headline Announcement

Jim Courtwood

Jim Courtwood
Author of the Time & Attendance Consultant's Guides

In the process of assisting clients in implementing a new time and attendance system, it is very common for companies to have to define some rules around their payroll, which they have not previously needed to define.  A good example of this is when companies use time-sheets and employees simply enter their start and finish times for the day. Typically, they enter the exact shift start and finish times.

When a company moves to an automated attendance system using a physical time clock, the arrival and departure times are going to be exact and either before or after the nominal start and finish times. This necessitates that the time clock system "rounds" the clocking event to a predetermined interval which can be different for early or late clocking events and this is where we get to the main subject of this article - Underpaying your employees.

There is potential for the application of a rounding rule to disadvantage the employee and, in Australia, this is generally not acceptable, and your company could be exposed to an unexpected pay claim from one or more employees.

The general rule regarding hourly paid employees is that they must be paid for every hour worked. This means that you generally cannot round a clocking forward to say the next 15 minutes if an employee is 8 minutes late unless of course they clock off early by the same amount and you still pay them to the end of the shift.

It is possible that over the day or even the pay period things may balance out, and the employee will, in fact, get paid the exact number of hours they worked. However,  the management of these expected hours by your attendance system is certainly not something you can expect from an entry-level or even many advanced level products.

With an increasing number of companies in the news for breaches of the Fair Work Act certainly anytime is a good time to review your attendance and payroll rules.  It can be challenging to interpret awards or workplace agreements, so it is worth considering getting some help in this area, whether that is from your accountant, legal advisor or perhaps an employer advocate or industry specialist.

This also highlights the importance of a robust time and attendance system that can cope with not only more advanced award interpretation, rounding and balancing rules but one that offers exceptional data retention and security.  Far too many companies are unable to access electronic employee records either because of a system failure or limited record capacity. The last thing you need is missing attendance history when you are defending a back-pay claim.

Some excellent resources for employees across Australia can be found at the links below.  As a trusted resource tool for HR and IR related matters – both offer free trial periods. Both of these platforms are powered by ALBA (AB Lawyers) the award winning Workplace Relations and Employment Team of the Year 2019

Jim Courtwood
Time & Attendance Consultant

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