Author of the Time & Attendance Consultant's Guides
In a recent article, I commented on the potential administrative nightmare caused by complying with the new Annualised Salary Provisions. The provisions require that accurate records of hours worked are used to make comparisons against those hours of work specified within the agreed Annualised Salary Arrangement (ASA).
The ASA has two main elements which trigger additional payments to employees.
The first is when an employees hours exceeds the "Outer Limits" of ordinary and overtime within a pay period. These additional hours must be paid within the relevant pay period for hours worked.
The second is the annualised average hours which must be calculated every 12 months, and if those hours exceed those specified in the ASA, the shortfall must be paid within 14 days.
Reducing Your Company's Exposure
Employers are exposed to additional salary costs both at the end of the year and on each payroll run. Managing employee costs is clearly all about regularly measuring employee hours and acting on that information. The trick is to make the recording accurate and to automate the reporting and, in particular, to fine-tune the exception reporting so you are aware of employees who may be approaching the hours threshold.
Where Time & Attendance Can Help
To comply with the new provisions, you need to record employee start and finish times along with their unpaid breaks. More importantly, you need to record this accurately, so manual or electronic times-sheets are just not secure enough. Some employees using these honesty systems will push the boundaries while others will be guilty of serious time theft. This was perhaps less of a problem when they were on fixed salaries but now its a different ball game so it becomes as important to record all employees times not just the hourly paid ones.
Time & Attendance systems, or at least the more advanced ones, are designed with all these issue in mind. They also offer much more. Often, the value of advanced features of these products becomes more evident when you think about how much work is involved in complying with the new Annualised Salary Provisions.
So how would it work?
Using biometric time clocks or mobile phone apps, employee attendance times will be accurate and instantly recorded in the system.
Automated systems can calculate each employee's progressive hours both in the current payroll period and annually and report any potential excess hours before they occur and avoiding costly adjustments.
Add to this the benefits of leave management, accurate award interpretation, time in lieu management, an employee self-service portal for leave applications and export to payroll, and you have a comprehensive employee management system.
Return on Investment
The most sensible approach to the introduction of any new technology product in your organisation is the Return on Investment (ROI) it will provide. Time and attendance systems automate the collection, storage and processing of employee attendance times and reduce manual processing, errors and employee time theft.
In many SME's, and certainly in large companies, the collective time and effort to produce this information can be equivalent to at least one full-time person.
Add to this the potential for saving un-budgeted salary costs by properly managing your Annualised Salaries, and the ROI becomes very significant.
Other attendance recording options - but not time sheets!
There are other time and attendance options with less functionality which will still do the basics of accurate attendance reporting, but certainly, manual time-sheets are not one of them. Often, companies use time-sheet programs to record attendance of staff members to meet other statutory obligations such as WHS. Even when they are used to check employee attendance they are not used as a basis for calculating payments. Now that salaried workers payment are linked to attendance it more important to record those times accurately.
When it comes to employee wages, Time-sheets are "supporting evidence" that your company uses to pay people according to their employment conditions. In some instances, they are supporting evidence for wages claims and, from 1st March 2020, they are supporting evidence for ensuring compliance with the Annualised Salaries Provisions.
When you think about it, they are evidence provided by the employee rather than the employer. This is clearly not a good position for an organisation.
So where to from here?
It is clear that the new record-keeping requirements will put an administrative burden on your business, and the potential for un-budgeted salary expenses is very real. Fortunately, there are systems which can help you deal with this new challenge and also address some of the other attendance and payroll challenges you may have.
If you would like more information or phone consultation you can email me or call me on 1300 553 254.
Time & Attendance Consultant
1300 553 254