Move Into the 21st Century with Electronic Timekeeping

Today, paper timesheets or punch clocks are old school. Employees have discovered work arounds to punching in, such as using co-workers to clock in for them at specific times or providing employers with inaccurate work times that pay employees for overtime they never really worked.

Electronic timekeeping, also referred to as digital time and attendance or biometric systems, automates the time-tracking process and keeps detailed real-time data of when employees arrive and leave work. A digital system automates the entire time-tracking process, keeping detailed actual data of when employees come and go; it’s then automatically transferred into a payroll solution.

These systems offer increased security and accuracy, but they can be costly. Read on to determine if such an investment ideally meets your needs.

Biometric timekeeping systems
These systems use unique physical identifiers to ensure that the employee is the same as the name indicates. This technology tracks the time workers clock in and out with greater security and accuracy.

Different types of biometric scanning devices include:

  • Face recognition. May be less than 100% reliable. When introduced as a smartphone feature, it failed to be foolproof, as close relatives could be taken for the phone’s owner. Not ideal for an employer/employee situation.
  • Iris recognition. Identifies the user by taking a photo of the patterns in the colored ring on the front of the eye, known as the iris.
  • Retina recognition. Looks deep into the eye, closely scanning and noting vein patterns in the back of the eye.
  • Fingerprint recognition. Each individual’s fingerprints are unique and, although they can become more difficult to decipher over time, they’re still valid for biometric identification.
  • “Hand geometry” recognition. Looks to match structures, such as the width of one’s hands and the length of the fingers.

Is biometric timekeeping worth the investment?

Employers primarily invest in biometric timekeeping to lessen the chance of time theft and other types of payroll fraud. Businesses that have struggled with this issue may find the initial investment a way to reduce buddy punching—meaning a friend checking in in lieu of the actual employee.

To increase your overall security and consider biometric screenings for building or data access, you can add a timekeeping component. Biometric scans require no additional input besides the employees themselves. You’ll never hear the excuse that your employee forgot to bring their fingerprints to work or the dog ate them.

How the Fingerprint System Works

Fingerprint time clocks are referred to as thumbprint time clocks and use a fingerprint scanner to match an employee’s fingerprint to a stored image of that fingerprint, enabling the employee to securely clock in or out of a work shift.

Everyone’s fingerprints are unique. The fingerprint reader recognizes and associates a fingerprint with an employee. It stores a numerical series of key points taken from the employee’s finger, referred to as “minutiae.” These fingerprint minutiae serve as landmarks; they’re encoded as a series of numbers and can be used to verify whether the fingerprint is that of a particular employee. An original finger-print image can’t be recreated from the minutiae.

As a result, fingerprint time clocks help to ensure each employee is clocking in or out for themselves. The downside is they’re not legal in some states. The Society for Human Resource Management indicates that Illinois is a state that doesn’t allow employers to use biometric data, such as fingerprints for time clocks. Data stored by these systems is frequently viewed as intrusive and not compliant with privacy-minded data collection rules.

What’s legal nationwide is a time clock app. These apps prevent an employee from buddy punching for another.

Which kinds of companies use biometric clocks?

Theoretically, any company that can afford them can use biometric time clocks. They’re popular among industries, such as restaurants and hospitality.

While biometric timekeeping systems may seem ideal, they’re costly. Small businesses can expect to outlay $1,000-$1,500, while larger corporations may invest five or six figures. You get what you pay for. You can obtain a less secure system at significantly less cost; however, you need to consider whether time fraud is an issue, because you may not be able to quickly recoup the cost in payroll savings, if at all.

Can you assure the protection of your employees’ personal data? Biometric data can be used in identity theft, so it needs to be kept highly secure. There have been class action lawsuits instituted against employers who failed to properly protect this very confidential information.

Something else to consider is that, today, in many instances, your employees may not all be housed under one roof. If you have employees who work remotely or travel a great deal for their jobs, this can pose challenges to conducting consistent biometric timekeeping. Biometric systems are less efficient the more decentralized your employees are.

What are the advantages of using biometric time clocks?

If your business hires hourly employees, you need a time clock to stay compliant with federal and state labor laws. An employee time clock keeps track of every hour an employee works, right down to the minute. You also have the option of rounding up or down that employee’s time worked, pursuant to federal labor laws. Such time clocks also track employee attendance.

Time clocks also protect employees in the sense that they can be assured they’re accurately paid for every hour they work.

Biometric time and attendance tools also address the employer’s concerns regarding time theft, such as when employees clock in and out for one another. However, check your legal jurisdiction, as biometric time clocks may not be legal in your area. You can also consult with a local employment attorney.

If your business has off-site employees, they can clock in and out from their mobile phone. To verify it’s a particular employee, their mobile phone also provides a screenshot of their location on a map.

Which biometric time clock will best suit my business needs?

Before selecting a biometric time clock, consult with a local employment attorney to make sure they’re legal in your state. Ideally, it’s best to use a time clock app that includes integrated scheduling, easy payroll export, hiring tools, etc. Then make sure it integrates with your employee scheduling software, your payroll provider, and your other team management processes. In addition, it should include a mobile app feature that lets you track which employee has clocked in, who’s late, and who’s on break. And, it lets you access this information quickly, irrespective of your location.

ASAP Payroll Service makes hardware clocks, such as card readers, fingerprint readers, and face clocks available to its customers.

An alternative to biometric time clocks

Often, your employees will want to protect their biometric data and would prefer that you not use a biometric time clock, even if it’s legal in your state. As an alternative, you could use cloud-based software to meet your time and attendance needs. With this free mobile app, your employees can view their schedule and timecard data on a mobile device. It also helps them to better budget their finances, because they’ll be able to estimate their pay each week.
A free mobile app can also empower your employees, because it can help them trade shifts, update their work availability, and check-in with the rest of the team…in real time from their mobile device. In turn, these self-service tools will save your supervisors time and establish a paper trail that human resources can use.

ASAP Payroll Service uses TimeWorks Mobile. It allows employees to track their hours on-the-go, punch in and out, view available time-off hours, and more. It’s available on either the iTunes™ App Store (IOS devices) or at the GooglePlay™ App Store (Android devices) and can be downloaded for free.

Other options include using a physical timecard, punch cards, a proximity card, or swipe cards; however, each has its own downfall. Regardless of which you use, these kinds of cards don’t protect from time theft. And, they might not be able to export to your payroll software, in addition to giving you very limited access to data.

Another option is using your tablet’s built-in camera. You’ll get a photo of each clock-in and clock-out on the employee timecard, so you can be sure the right person is clocking in for their shifts. Paired with the included shift scheduling app, which you can access from any web browser, you’ll get a better handle on overtime hours, total payroll and labor costs, and robust attendance tracking data that includes a ranking of who on your workforce is most often on-time for their shifts. You’ll also get other reports that’ll help you and other business owners more efficiently manage your workforce, so you can focus on growing your business and empowering your employees.

In turn, your supervisors will be in charge of running payroll and better coordinate with human resources. The most time will be saved when your workforce management systems all integrate with one another.

What Is Pay-as-You-Go Workers’ Comp?

Workers’ compensation insurance basics

Irrespective of the type of business you run, there’s a chance that your employees could get injured or sick. They might slip on a wet floor, fall off a ladder, cut themselves with a sharp instrument, or get in a car accident while running a business errand. Because of the numerous ways your employees can get hurt or sick, your business must have workers’ compensation insurance to cover them.

It’s state-mandated insurance that protects your business. The sick or injured employee receives workers’ compensation benefits to cover expenses, such as medical bills, job retraining, and pay while off from work. While the majority of states require businesses have workers’ comp insurance, in some states, businesses with a certain number of employees may elect to opt out of coverage.

When an employee accepts workers’ comp benefits, they typically waive their right to sue for the injury or illness. Workers’ compensation insurance covers employees regardless of who is at fault. The illness or injury could be caused by you, the employee, a co-worker, a customer, or someone else.

However, there are some restrictions to receiving workers’ compensation insurance. An employee cannot receive benefits if the incident was purposefully self-inflicted, not job-related, or was incurred while committing a crime or violating a company policy. If you suspect workers’ compensation fraud, you’ll want to take the necessary steps to counter it. And, while many states offer workers’ compensation insurance through a state-operated fund, there are also many private providers who offer the coverage.

If your employee has incurred a job-related illness or injury, you should not retaliate or threaten that employee to prevent them from filing a claim. If you attempt to take recourse against the employee, they can report you to your state or insurance agency.

Did you know that an employee doesn’t have to incur an accident or injury at work to receive these benefits? The illness/injury just needs to be work-related. An employee can get hurt while running a business errand or traveling for business. Or it can happen over a long period of time, such as carpal tunnel syndrome, chronic back problems, lung disease, hearing loss, and/or stress-related injuries.

Generally, employers can purchase workers’ compensation insurance from any provider they want (state or private). However, employers in North Dakota, Ohio, Washington, and Wyoming are required to purchase their insurance directly from the state. These four states are referred to as monopolistic states.

What is pay-as-you-go workers’ comp?
The pay-as-you-go method allows you to pay your workers’ compensation premiums based on your actual payroll and exposure risk, instead of the budgeted payroll you believe will be accurate for the year. This helps eliminate surprises during your workers’ comp audit.

You’ve probably received a few emails, phone calls, or letters offering pay-as-you-go as an alternative to traditional workers’ comp insurance. It lets you pay your workers’ comp coverage by bundling or combining it with your regular payroll. If you work with a payroll or HR service, they’ll make sure your employees and your workers’ comp premiums are paid every pay period. You’re then presented with a single bill to cover all the costs for that time period.

Traditional workers’ comp plans, compared to pay-as-you-go, require large lump sum payments to cover the estimated cost of your liability. With pay-as-you-go plans, your workers’ comp insurance liability is based on each payroll run. If you add or lose employees, your premium liability adjusts accordingly. Pay-as-you-go provides all the coverage and compliance of workers’ comp with none of the stress.

Unless you live in a monopolistic state (mentioned above), you can take advantage of pay-as-you-go workers’ comp.

What Are the Benefits of Pay-As-You-Go Workers’ Compensation Insurance?

Deciding which type of workers’ compensation insurance to select comes down to what works best for your company. For many business owners, pay-as-you-go workers’ comp is a good alternative to traditional lump sum payments. Here’s why:

  • Making hefty annual payments can put a strain on your business budget and harm your business cash flow management. Depending on factors, such as where your business is located, the industry, and how many employees you have, workers’ compensation insurance can quickly add up.
  • Knowing exactly how much your workers’ comp should be is difficult to predict. Pay-as-you-go calculates up-to-date workers’ comp rates with each payroll cycle. Traditional workers’ compensation insurance premiums are based on estimates. You might decide to hire or let go of some employees, which can affect your rate. Traditional workers’ compensation insurance requires that you project what your payroll will be for the year and pay it upfront. Then, at the end of the year, your insurance provider either refunds the difference or requests further payment.
  • With pay-as-you-go workers’ comp insurance, the money you owe is based on your actual payroll. This lets you pay accurate premium amounts and avoid over- or under-estimating. And, as a result, you’ll incur a simplified audit process.
  • Paying your premium can slip your mind. But with pay-as-you-go workers’ compensation, your policy provider automatically collects your premiums with each payroll and debits your bank account.
  • Makes the auditing process is easier, which can save you time and money.
  • What you pay to a payroll service is only your premium payment. You still need to work with a state-approved insurance provider for your coverage.
  • Your premium is based on the payroll generated during a pay cycle and is based on a rate per 100 of payroll per job classification.
  • Pay-as-you-go coverage often requires a down payment, so that a notice of cancellation can be covered if your provider cancels your coverage.
  • This method is still auditable, because all workers’ comp insurance is auditable.

 

There’s also a down-side to consider

  • You can’t budget each pay cycle for workers comp.
  • You might not always see the true cost of your workers’ comp, as it is bundled with the rest of your payroll.
  • Not all insurance companies allow a pay-as-you-go method, so your options may be limited and you may not get the best rates.

Reporting actual payroll wages and only paying premiums based off those actual wages make pay-as-you-go a great alternative to the traditional estimated billing process. However, ultimately, the choice has to be what works for your business. Today, insurance providers offer a wide variety of solutions and flexibility for their programs, so you may simply need to contact your provider to find out what they offer.

If you’re not sure what to do about your workers’ comp coverage, contact us at ASAP Payroll Service. We’ll discuss your options with you to help you make the best decision for your business.

Making Employee Onboarding a Win-Win

While it’s imperative that you recruit the best candidates for positions within your company, screening, interviewing, and offering the job are only the start in terms of building a quality team. The onboarding process, which takes up to a year, assures that the new hire becomes a contributing member of the team and adapts to the work culture in the briefest, most efficient way, thus increasing their chances of acclimating to the new environment and feeling productive sooner.

The difference between orientation and onboarding is that orientation is a stage of onboarding, where new employees learn about the company and what’s expected of them in terms of their job responsibilities and reviewing the employee handbook. Orientation refers to paperwork and other routine tasks that must be completed.

Onboarding, on the other hand, is designed to build engagement from the initial contact until the employee becomes established within the organization. Onboarding acclimates the new employee to becoming a contributing member of the staff in the briefest time possible, while engaging the employee in enhancing their productivity and improving the company’s opportunity to retain that employee. Plus, depending on the company’s size, industry, and organizational culture, it may adapt or modify the onboarding process to best meet the new hire’s needs.

Why is Onboarding Important?

It’s critical to set the right tone starting on the first day of employment in order to engage the new hire in making a long-term investment. A solid onboarding process plays a significant role. It can help to capture the employee’s commitment within the first six months and avoid up to a 20% turnover during the first 45 days, which is costly to an organization. Direct replacement costs can be as high as 50%–60% of a departing employee’s annual salary, with the total costs associated with turnover ranging from 90%–200% of the employee’s salary.

Before and After Hiring

There are organizations that break up the onboarding process into pre- and post-employment. For example, prior to joining the company, a portal can be set up for the new employee. This helps acclimate them to the organization by way of learning its history and culture, reading articles, watching company videos, and completing necessary paperwork. It also includes social onboarding: helping the new hire acclimate to the team, social dynamics, and technical onboarding, all which address learning the new job. This affords them the opportunity to wind down responsibilities from their previous job and easily transition into the new position.

Investing in the New Hire

As mentioned earlier, the ongoing process of onboarding is an investment in the new hire becoming a productive team member as quickly as possible and learning the specific role they will play in achieving team or company goals. The rewards make it worth the investment, because onboarding equips new employees with the knowledge and skills they need to succeed at their job. They also need to learn what the company plans to provide in terms of management support, access to resources, or performance reviews.

It’s a Mutual Responsibility

Human resources or organizational development (HR/OD) professionals, instructional designers, trainers, managers, and the new employee all have a responsibility when it comes to onboarding:

  • HR generally sends the offer letter and makes sure that the new hire completes the necessary paperwork.
  • Depending on the size of the organization, HR or OD professionals create and deliver the general orientation session. Other organizations might have instructional designers and trainers handle this.
  • The employee’s direct manager will be responsible for going over the employee’s training plan: a plan that outlines what the new hire is expected to complete over a stated period of time. Each training plan pertains to a single company or learning environment and can be designed to meet one or more high-level learning objectives.
  • Managers should routinely check with their new employees and be available to answer questions and help them acclimate to the position, making sure their onboarding assignments have been completed.
  • In turn, it’s the new employee’s responsibility to ask questions, complete benefits paperwork, create necessary new user profiles, and complete all onboarding tasks and training assignments in a timely manner.

As stated earlier, hidden costs of replacing an employee, in terms of turnover, can be as much as 150% of the employee’s annual salary. This encompasses fees paid to recruiters, the cost of interviewing, and the dollars invested in training the new employee. These costs often show up in lower productivity and diminished morale among the remaining employees who are expected to do more and identify the special knowledge or experience the departing employee knew.
To better assure the new hire’s success:

  • Prepare a detailed outline of what’s expected in terms of their responsibilities to the company. If possible, share these expectations with the candidate during the interviewing process to establish clear communication and avoid any misunderstanding.
  • Make sure the new hire’s work area is set up and ready upon their arrival on the first day. Give the new hire their phone extension, make sure their computer is operational, and double-check that the workspace makes them feel welcome and is clutter free. If that workspace previously served as storage, make sure there are no hints of its previous role. The IT, Finance, and Customer Service departments may play a role in the onboarding process by setting up the new employee’s computer, their financial records, or being ready to train the new employee on customer service protocol.
  • Notify the employees within the department at least one day in advance by email or memo that the new employee will be joining the team. It’s imperative that the new hire be properly greeted by his or her fellow employees on the first day. This helps them feel welcome and avoids any embarrassment.
  • If time permits, invite the entire team to join the new hire for lunch on the first day. This fosters establishing socialization and gives the new employee an opportunity to more quickly feel comfortable with his or her new co-workers. Be sure to continue that good will for the first week or two by having members of the team take turns accompanying the new hire to lunch as a way to help him or her become more comfortable with the new environment.
  • Select a peer who will be working with the new hire and ask him or her to help orient and acclimate the new employee once onboard. Select a current employee who’s a good role model and has a positive attitude about the assignment they’ve been given.
  • To help make the first days of a new employee’s transition easier, ask current employees to share their experiences when they first joined the company. Was there anything they would have appreciated initially that would have made them feel more welcome? This feedback can be very valuable and doesn’t require the manager second guessing what a new hire would need at the outset.
  • Early on, it’s important for supervisors and managers to be part of the onboarding process. This helps set the right tone and conveys to the new hire that they’re respected, valued, and appreciated; it offers encouragement and helps to establish a solid rapport. This can significantly deter any dissatisfaction down the line with the immediate manager or supervisor. After a reasonable time, managers should routinely offer support and encouragement, review the employee’s progress, and provide feedback.

Onboarding sets the tone for the relationship between engaged employees and the company’s success in terms of profitability, safety, turnover, absenteeism, product quality, and customer satisfaction. Successful onboarding can boost employee engagement and morale. This includes the company’s commitment to professional growth or management acknowledging the employee’s skills and talent.

When Onboarding Programs Fall Short

Onboarding programs typically fail due to insufficient planning, time, and resources, according to the Association for Planning and Development. Other not-so-obvious reasons can make a difference between a successful and unsuccessful outcome, including:

  • Failure to match what’s perceived in the onboarding process and reality
  • Lack of employee engagement with the onboarding program
  • No compelling business case for the onboarding program
  • The employee misfits with the company
  • Ignoring diverse needs, metrics, and accountability
  • Having a “do-it-yourself” mentality, where no one assumes responsibility or ownership for onboarding
  • Programs that only focus on employee benefits
  • Managers’ unavailability, lack of involvement, and lack of guidance
  • Information overload at a fast pace
  • Misconstruing onboarding as a checklist or carving out time to complete orientation paperwork
  • Skipping defining and discussing company expectations, and delaying explanations about how the employee will contribute to the business
  • Assuming new employees will understand how their roles fit within the organization without providing detailed information
  • Taking for granted that unwritten rules are self-evident
  • Believing there’s no need for a full agenda of activities and events that the employee is expected to meet, including being introduced to key people
  • Waiting to explain how performance will be evaluated only at review times
  • Expecting employees to perform their role in the department/company without enough time for them to develop a basic level of role mastery

A benefit to onboarding is that it affords work teams the opportunity to reinvent themselves and break down barriers. It can provide a valuable opportunity to see the organization through the new hire’s eyes and learn/benefit from their perspective.

Successfully onboarding a new employee requires clear, consistent communication throughout the process. Research shows that new employees’ value clear, consistent communication from their new organization. Knowing when and where to show up on the first day, what to expect upon arrival, knowing whom they will be working with, and what their role will consist of, are important components of a good onboarding experience. Welcome aboard!