No company wants to overpay workers, and no one wants to underpay. Ensuring accurate payroll is most companies’ number one reason for keeping time and attendance records. But it might surprise you to know that it’s probably far from the most important reason to do so.
Keeping accurate time and attendance records can be critical in ensuring that your company is in compliance with mandated laws, including those for paid sick leave, overtime pay and requirements of the Affordable Care Act (ACA). Violations of these laws can have serious repercussions for a company, including legal penalties. Take a look:
Affordable Care Act Requirements
2016 is the first year for which IRS reporting will be required under ACA regulations. The forms themselves are causing havoc for many companies that don’t have good records and accurate time and attendance is critical to ensuring compliance.
ACA regulations require detailed tracking of employee hours to ensure that a company is correctly classified as a small employer, large employer or applicable large employer group member. In general, those companies with 50 or more full time equivalent employees – those who work at least 30 hours a week – are considered large employers. Large employers are required to make an offer of health care coverage to full time employees as defined by the ACA and there are penalties for failing to do so.
We’ve detailed the ACA reporting requirements previously, but unless your company has an accurate, integrated time and attendance payroll system that can provide the necessary reports, it may be nearly impossible to ensure compliance and avoid penalties.
Paid Sick Leave
Paid sick leave is becoming a political issue across the country. Already several states and municipalities have enacted laws governing guaranteed paid sick leave. If your company is in one of these locales, it is critical that you have accurate time and attendance records and understand the requirements to ensure that sick leave is accrued and applied appropriately for every employee, and that you meet any reporting requirements.
Employee classification and overtime compensation and also current hot issues. Violations in calculating pay based on hours worked can result in fines penalties under the Fair Labor Standards Act and state law. Knowing which employees are exempt and which are non-exempt, and accurately calculating any owed overtime compensation can save your company money and legal headaches.
There are a number of options available to ensure accurate time, attendance and payroll records ranging from manual systems to fully integrated or high tech solutions. A good system will ensure that your records are accurate and that you can easily access and report any data needed for IRS, FLSA or other needs. If you’re not completely confident your current systems can do this, give us a call today and we’ll review them with you and help find the right solution to avoid costly errors.
If you’re considering an automated, integrated system, a payroll services company like Deluxe Payroll is a great place to start your research – 443-279-9000 and ask for Brent Sappington or email Brent @ email@example.com.