ACHIEVING TIME & ATTENDANCE COMPLIANCE AMONG YOUR EMPLOYEES AND MANAGERS

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1 ACHIEVING TIME & ATTENDANCE COMPLIANCE AMONG YOUR EMPLOYEES AND MANAGERS COMPANY HANDBOOK Time & Attendance Policy FROM A LEADER IN WORKFORCE MANAGEMENT SOLUTIONS

2 INTRODUCTION ARE YOUR EMPLOYEES & MANAGERS COMPLIANT WITH YOUR TIME AND ATTENDANCE SOLUTION? With any time and attendance system, employees will always forget to clock in or out on occasion. Because there are instances where the failure to comply is an honest mistake, managers can be tempted to accept these omissions without question. For most organizations, compliance levels should be above 90%. Lower levels of compliance may indicate managers are spending more time than is ideal fixing missing records that may be the result of deliberate forgetfulness on the part of certain employees, causing inflated payroll and overtime costs. The key issues for any organization are: 1. How often are time and attendance records missing? 2. Is the frequency minimal or excessive? 3. Are there frequent offenders who drag down overall operational effectiveness? 4. Are weaknesses in tracking compliance indirectly encouraging absenteeism? 5. Do our organization s policies and procedures maximize compliance or encourage avoidance? This publication addresses the costs and risks of low levels of time and attendance compliance, outlines best practices for managing time and attendance compliance to achieve higher level results, and includes samples of documents to use. THE COSTS AND RISKS OF LOW TIME AND ATTENDANCE COMPLIANCE There are no immediate legal or regulatory risks associated with lower levels of compliance for time and attendance. However, there can be significant productivity, payroll, and overtime costs. A high level of non-compliance may also cause issues during an audit if time and attendance is used for billing. If an employee is late for a shift, it can result in another employee working overtime. If the same employee requests their manager clock them in at the time they were scheduled to arrive rather than the actual late time, the result might be overtime for one employee and unearned payroll for the offender. In addition, if this practice becomes prevalent, the result can be loss of manager productivity due to investing excessive time in fixing time and attendance records. Other employees can suffer a loss of morale when they witness their colleagues working the system. If there are a high percentage of manually entered records without adequate documentation, an auditor may suspect that the cause is deliberate falsification to inflate billing. WORKING THE CLOCK If employees are working the clock (that is, clocking out at 7 minutes before scheduled time) a loss of productivity can occur. Many organizations don t pay or bill minute to minute, often preferring to round the time. The most common solution is often called 7/8 rounding. For example, if an employee clocks-in at 8:07, the time is rounded back to 8:00, whereas a clock-out at 15:53 is rounded to 16:00. Some employees know this and get savvy about its implications. An employee consistently working this system can be absent for over an hour a week and suffer no financial penalty. Employees could be waiting in line to clock-out 7 minutes early. Furthermore, that missing hour is then factored into benefit time and even overtime. This problem can be further compounded where employees clock out and in for lunch. ACHIEVING TIME AND ATTENDANCE COMPLIANCE AMONG YOUR EMPLOYEES AND MANAGERS 1

3 HOW TO AUDIT YOUR TIME AND ATTENDANCE SYSTEM FOR COMPLIANCE The first step is to implement a regular policy of reviewing time and attendance internally. If the percentage of records that go straight to payroll and/or billing is in the high 90th percentile, there probably is no issue. If the percentage of changed or manually added time and attendance records is above 10-15%, then it is necessary to start an investigation. Begin by asking the following questions: 1. Is there any pattern to the changes? Are the manual updates caused by frequent offenders, employees forgetting, or managers not following policies and procedures? 2. Does your organization have clear policies and procedures to handle missing records? 3. Does your organization have a system in place to identify frequent offenders? 4. Are some managers making more edits than average? Some managers may be more effective than others at enforcing compliance with policies and procedures. A higher than average number of edits from certain managers may highlight other issues in the areas they supervise. 5. If using telephone timekeeping, is Caller-ID being verified? Is voice identification ever used? 7. Is the time and attendance hardware reliable? Using shared PCs to clock in or out often provides an easy excuse someone was using the PC, the PC was not switched on, the internet was down, etc. Typically, time and attendance systems that use a web clock with shared PCs have lower compliance levels. When this is the case, consider implementing biometric technology. 8. Is the time and attendance system too complex for employees? Are employees required to enter too many codes that they may get wrong? Is there any way to simplify this process? Are records being changed to apply the records to a different cost center? Is there any way to simplify this process? If this is not the case, then organizations need to examine employees habits. 6. Is buddy punching an issue? Typically, buddy punching causes overlapping shifts or an employee to clock in regularly a few seconds later than another employee. A careful review of time and attendance records will be necessary. To spot overlapping shifts, look for an employee not clocking out when relieved. Question why the employee did not clock-out when their replacement had arrived. Asking questions often puts a stop to practices like this. If this is not practical, consider implementing biometric technology. ACHIEVING TIME AND ATTENDANCE COMPLIANCE AMONG YOUR EMPLOYEES AND MANAGERS 2

4 HOW TO MAXIMIZE COMPLIANCE No time and attendance system will achieve high compliance levels without known and effective policies and procedures for which there are consequences. Unfortunately, as usual with anything involving human behavior, there is no one simple solution. Multiple steps must be taken and enforced consistently. The policies and procedures should be written down and given to all employees. 1. Create a written time and attendance policy document that all employees and managers receive copies of. See the end of this publication for an example. 2. Make sure employees have every opportunity to identify missed records and request a manager correct them. a. Provide employee self-service, allowing employees to review their records and submit requests to change or add records if necessary. This creates an audit trail of who is making requests and which managers approve the requests the most. b. If using telephone timekeeping, enable features that tell the employee by voice message that there is a missing attendance record. c. Use HR alerts to automatically text or employees if there are missing records. 3. If an employee has a missing attendance record, make the employee explain the reason in writing. This will inhibit deliberate forgetfulness when late or leaving early. Document the reason the employee gave. If this is the third time this year that the employee s grandmother died, the reason is probably not legitimate. 4. If this process results in some employees experiencing a delay in payment, this is an acceptable, even desirable, outcome. The employee must be paid for work performed. But if the employee fails to provide an accurate time record (just as in a manual paper system) and the employer has made reasonable provisions for the employee to correct the records, no employer can be expected to pay the employee for a shift without knowing what hours the employee worked. A delayed payment for a shift in the next pay period or in a make-up payroll will often be sufficient to nudge compliance numbers higher. 5. Track hour variance to schedule and hour variance to budget. Have someone in central administration review these every pay period. Managers are often busy or may not be inclined to regard this as part of their job description. Instances of actual being higher than schedule or budget can pinpoint a problem area that merits special attention. 6. Set standards for compliance and non-compliance. For example, if an employee fails to clock in or out so many times in a month, make this a cause for a written warning. Some organizations establish small rewards for individuals or groups being compliant. 7. Ensure attendance is part of the review process and that every employee and manager knows that attendance is a factor in their review. 8. To check for employees working the clock, use attendance reports to audit employees who consistently clock-in or out during critical change points. Organizations that achieve higher levels of compliance with time and attendance are generally more effective in fulfilling their mission to deliver the services to their clients. The rewards are significant, including: Optimized productivity Minimum amount of time being invested by front line managers to correct mistakes Payroll costs aligned with hours actually worked Administration only investigating exceptions Organizational morale protected by the consistent and fair application of policies and procedures across the whole organization ACHIEVING TIME AND ATTENDANCE COMPLIANCE AMONG YOUR EMPLOYEES AND MANAGERS 3

5 TIME AND ATTENDANCE POLICY Timely and regular attendance is an expectation for all employees. To ensure adequate staffing, positive employee morale, and to meet expected productivity standards throughout the organization, employees will be held accountable for adhering to their workplace schedule. In the event an employee is unable to meet this expectation, he/she must obtain approval from their supervisor in advance of any requested schedule changes. This approval includes requests to use appropriate accruals, as well as late arrivals to or early departures from work. Departments have discretion to evaluate extraordinary circumstances of a tardy, absence, or failure to clock in or clock out and determine whether or not to count the incident as an occurrence. HR is available to advise supervisors regarding the evaluation of extenuating circumstances. PROCEDURE I. Absent An employee is deemed absent when he/she is unavailable for work as assigned/scheduled and such time off was not scheduled/ approved in advance as required by department notification procedure. II. Tardy An employee is deemed to be tardy when he/she: Fails to report for work at the assigned/scheduled work time. In these instances, managers may replace the tardy employee for the full shift. Managers should document absences by creating a memo Timecard using Non Payable Pay Type, Absentee Code, and Comments to document the absence. Leaves work prior to the end of assigned/scheduled work time without prior supervisory approval. Takes an extended meal or break period without approval. Arrives to work past his/her scheduled start time; may be replaced for the full shift at the discretion of his/her supervisor. Managers should track late arrivals and early departures using the reports provided III. Time and Attendance Failure to Clock-In/Out Employees are required to follow established guidelines for recording their actual hours worked. A missed clock-in/out is a violation of this policy and includes: Failure to clock in/out at the beginning and/or end of their assigned shift. Failure to clock in/out on their designated time clock for the meal break. Failure to accurately and timely report time worked. Clocking in/out early (or late) of assigned shift without prior approval. IV. Departmental Notification Procedure Employees are expected to follow departmental notification procedures if they will be late for work, will not be at work, or are requesting planned time away from work. Employees must request in advance to their supervisor or designee and in accordance with departmental procedure if they wish to arrive early or leave early from an assigned shift. At the time of notification/call, the employee must notify their supervisor when an absence is due to a documented/approved leave of absence (e.g. PTO, FMLA) to ensure appropriate tracking of leave utilization and absenteeism. An employee who fails to call in and report to work as scheduled for three consecutively scheduled work days will be viewed as having abandoned their position and employment will be terminated. The supervisor should consult with Human Resources if this situation occurs.

6 TIME AND ATTENDANCE POLICY Incidents of neglecting to follow the departmental notification procedures, including No-Call/No-Show, will be addressed in accordance with the Progressive Discipline policy. V. Progressive Discipline Process Supervisors should monitor their employees attendance on a regular basis and address unsatisfactory attendance in a timely and consistent manner. If supervisors notice a pattern of unscheduled usage of accrued PTO, the supervisor should discuss this concern with the employee. When an employee has been previously counseled under the Progressive Discipline Policy and/or the Performance Accountability and Commitment Policy, the totality of the circumstances will be assessed when determining further action. For situations involving suspension or termination of employment, the supervisor should consult with Human Resources prior to implementing disciplinary action. Timely and regular attendance is an expectation of all employees. Consequently, those employees who have exhibited unsatisfactory attendance which resulted in disciplinary action (written or final) during the course of the year may have the behavior documented in their annual evaluation. Occurrences An occurrence is documented as an absence, tardy, or missed time clock in/out. While an absence refers to a single failure to be at work, an occurrence may cover consecutive absent days when an employee is out for the same reason. The following grid is designed to provide guidelines when addressing the total number of occurrences in a rolling 12 month period, provided that the reason for an occurrence is not protected under FMLA. OCCURRENCE 1. Occurrence is equal to: 1 absence 2 tardies 2 missed clocks TOTAL # OF DAY ABSENT Consecutive or non-consecutive Does not apply to tardy OCCURRENCES/DAYS DISCIPLINE STEP AND ACTION 4 Occurrences Step 1: Verbal warning 6 Occurrences Step 2: Written warning 8 Occurrences Step 3: Final written warning 10 Occurrences Step 4: Termination 6 Days Step 1: Verbal warning 9 Days Step 2: Written warning 12 Days Step 3: Final written warning 15 Days Step 4: Termination 1 Occurrence Step 2: Written warning SINGLE DAY OF NO-CALL / NO-SHOW 2 Occurrences Step 3: Final written warning 3 Occurrences Step 4: Termination NOTE: The total number of days an employee is unavailable for work as scheduled and the total number of occurrences are considered when applying discipline. For example, at Step 1 the maximum number of days the employee is allowed to be unavailable for work before receiving a verbal coaching is 6, regardless of the number of occurrences.

7 TIME AND ATTENDANCE POLICY New Hire Orientation Period An employee, within his/her orientation period, who has two occurrences should receive a written warning; if the employee has greater than two occurrences within the orientation period, employment may be terminated; should the orientation period be extended, this rule still applies. Holidays If an employee calls out of work the day before, the day of, or the day after a holiday, the manager will review the circumstances of the absence. Based on this review, the manager has the discretion to determine whether to count the incident as a regular occurrence or go directly to issuing a written warning for the holiday-related call-out. If an employee is already on discipline they can progress to the next level. VI. Departmental Policies-Approval Process entities may develop a departmental attendance/punctuality policy that meets the unique operational needs of the department. If determines that a departmental policy is needed, the department will follow its entity s approval process to establish the policy which requires final approval from the entity s Senior Executive Leadership. This policy is intended as a guideline to assist in the consistent application of company policies and programs for employees. The policy does not create a contract, implied or expressed, with employees, who are employees at will; this status cannot be modified except by authorized officers. reserves the right to modify this policy in whole or in part, at any time, at the discretion of. Approved by: Date: Approved by: Date: Approved by: Date:

8 MISSING CLOCK IN/OUT AUTHORIZATION FORM Please submit this form to your supervisor/manager as soon as possible. If this form is not submitted in a timely manner for approval, payment for the shift in question may be delayed. Failure to follow proper time and attendance procedures can also result in delayed payment for shifts not accounted for by the time and attendance systems in place. Name: Employee #: Date: Date of Missing Punch: (check one) CLOCK IN CLOCK OUT Time of missing punch: (check one) AM PM Reason for missing punch: Employee Signature: FOR SUPERVISOR USE ONLY Missing punch approved (check one): YES NO Date: Supervisor Signature:

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