Why would an automated timekeeping system have anything to do with the Patient Protection and Affordable Care Act you ask? Quite frankly, everything!
It has become critical, for employers to track and accurately measure employees' hours for the new health care compliance requirements. Beginning this year employers need easy access to historical time records and proof of employees' hours for the Patient Protection and Affordable Care Act.
To understand why you first need to to understand a few basics of the new health care law.
- For your company you have to define a measurement period from 3 to 12 months. This is the period of time after hiring an employee where you measure and track the employees hours for the purpose of classifying them as a full or part-time employee.
- The Patient Protection and Affordable Care Act requires you, as an employer, to determine the number of full-time employees or full-time equivalent employees. To calculate this, requires you have an accurate record of how many hours each employee works for the months you choose for your measurement period.
- If you calculate the number of full time employees and full time equivalent employees and you have more than 50, you are required to comply with the health care law mandates for a large employer. This means providing a minimum amount of health care coverage for your full-time employees or paying a fine.
- You only pay health care coverage (or fines if you choose not to provide health care coverage) for workers that are classified as full time employees.
Since health care coverage cost or fines are tied directly to the number of full time employees you have, and a full time employee is determined during your measurement period it will be important to:
- Have an accurate way to track an employees hours.
- Pull custom reports over a 3-12 month period that corresponds with your measurement period.
- Have an automated employee time and attendance system that sends out an alert as a part-time employees' hours reach a threshold you do not want to exceed. Many companies have opted to limit their part time employees to 26 hours per week or less. This minimizes their healthcare coverage cost or fines by minimizing the number of full time employees they have on their payroll.
An automated timekeeping is ideal for effective time tracking and reporting. For any company that has more than 50 employees it will be difficult to maintain adherence and accurately track and pull reports to determine compliance to the new helathcare law with some automated timekeeeping system.
In addition to helping you comply with the Patient protection and Affordable Care Act an employee time and attendance system will help you comply with the Fair Labor Standards Act which requires employers to:
- Collect and maintain certain key employment data
- Retain key timekeeping records for a minimum period of time as specified by the FLSA
- Have available key timekeeping records in a central location for immediate access if requested by a regulatory agency.
- Demonstrate a complete and accurate system for measuring and tracking employee hours as required by the FLSA.
We outline these requirements in a previous article that can be found here.
We also outline in our previous article that can be found here how an automated employee time and attendance tracking system will save you money and presents a great return on your investment.
If you are not currently using an automated employee tracking system it is an investment that is well worth making. In the coming years, most businesses will be unable to operate and compete efficiently without accurately tracking employees hours to manage employee cost and having a system for accurately reporting those hours to regulatory agencies.
If you would like more information about automated timekeeping systems you may visit our timekeeping page here.
We are also offer a free 30 day trial for a timekeeping system that cna be requested here. No credit card number required or long term obligation required. Just sign-up and you have full access to the web clock so you can check it out to see if it meets your needs.
When it comes to compliance with labor laws, the government does not mess around. Did you know that violations of the minimum wage or overtime pay can result in civil penalties exceeding $1,000 or that penalties for non-compliance of youth labor laws can exceed $10,000?
As an employer, it is your responsibility to know and comply with the labor laws. As with taxes and other laws, ignorance of the law is not a defense against non-compliance.
- What is the FLSA and Why do I Need to Care
The Fair labor Standards Act (FLSA) Recordkeeping (29CFR Part 516) specifies the minimum wage, overtime pay requirements and youth employment standards. Failure to comply with the regulations set forth by the FLSA will result in penalties, fines and possibly imprisonment. Good accurate record keeping is key to showing compliance.
- Collect All Required Information
Employers must maintain records for at least 14 key pieces of data for an employee. Including:
- Employers full name and social security number
- Complete Address
- Birth date if younger than 19
- Sex and occupation
- Time and day of week when employee’s work week begins
- Total hours worked each week
- Basis on which employee’s wages are paid (e.g., $9 per hour, $440/per week, piecework)
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the work week
- All additions or deductions from employee’s wages
- Total wages paid each pay period
- Date of payment and pay period covered by the payment
- Record retention is Important
The employer must maintain key records for a minimum length of time. The table below shows the length of time these records must be maintained.
||Min. Length of Record Retention
|Payroll Records, Collective Bargaining Agreements
|Records on how wage compensation is calculated (time cards, piece work tickets, wage rate tables, work and time schedules, and records of additions to or deductions from wages.
- Easy and Quick Access to Records is Critical
Records must be kept and maintained at place of employment or in a central records office and be readily available for inspection. An inspector may request copies of records or require confirmation of computations.
- Employers Have Flexibility on Timekeeping System
Employers are not restricted to any one system or method of timekeeping, but must have a timekeeping plan in place that is acceptable and can be proven to be complete and accurate.
Having information readily accessible, easy to sort, find, and produce on-demand demonstrates to an inspector or auditor that you are organized and have a system and procedures in place for the required documentation. Most importantly, it allows you to prove compliance with the labor laws. The more quickly you can satisfy the auditor, the more quickly you can get back to activities essential to managing and growing your business.
What system are using? sign up for a 30 day Free Trial for our automated timekeeping system or learn more about our automated timekeeping system.