Submission Date:
Question:
I work at a library with a diverse range of employee types, including part-time, full-time, union, and non-union staff. Unfortunately, time tracking methods vary widely, with most employees using paper timesheets. There are also inconsistencies in how comp time, overtime, flexible schedules, and double time are applied, even for those not in the union.
What is the best approach to standardize and streamline scheduling, timekeeping, and compensation management for greater efficiency?
Thank you for your guidance.
Answer:
The best approach to standardize and streamline scheduling, timekeeping, benefits, and compensation management is to use a single automated payroll system that enables tracking of all accruals and leave time offered by your library.
Although this sounds obvious,[1] at institutions with multiple unions, different “types” of employees, and without centralized HR to coordinate things, transitioning to such a system can be quite complex, causing some libraries to delay implementation.
Facing that complexity head-on and transitioning to a single automated payroll system is worth it. Aside from the simple fact that it is only fair for an employer to record everyone’s hours consistently, there are significant compliance risks for imprecise or irregular payroll practices, including:
- Failure to retain payroll records (penalty: a fine of not less than five nor more than ten thousand dollars in addition to any other penalties otherwise provided by law);[2]
- Failure to accurately confirm compensation terms (penalty: damages of up to $250 dollars per day, per employee, unless employees are paid all wages required by law);[3]
- Failure to pay wages earned due to error or intentional under-payment, a.k.a. “wage theft” (penalty: the sum of five hundred dollars for each such failure);[4]
- Failure to abide by collective bargaining terms (penalty for breach of contract: compensatory damages and legal fees);[5]
- Failure to properly withhold state and federal income taxes (penalty: federal Class E felony, up to 5 years in prison[6] and a state penalty equal to the sum of the total amount of the tax evaded, or not collected, or not
accounted for and paid over, and the interest that has accrued on
the total amount of tax evaded on the date this penalty is first imposed
until this penalty is paid with interest thereon.);[7] - Failure to properly track accrued paid sick leave based on hours or days worked (penalty: may be subject to civil/administrative actions and/or criminal penalties, including but not limited to, an order assessing the full amount of the wage underpayment, 100% liquidated damages, and civil penalties in an amount up to double the total amount to be due);[8]
- Failure to pay overtime and/or properly track “comp time”;[9]
- Failure to properly track hours worked for purposes of New York State Retirement contributions (penalty: embarrassment as the NYS Comptroller conducts a review and correction);[10]
- Failure to accurately report hours works to the NYS Unemployment Insurance Program (penalty: many);[11]
- Failure to accurately report hours worked to a workers’ compensation insurance carrier (penalty: if intentional, a Class E felony);[12]
- Failure to accurately report hours worked to a disability insurance carrier (penalty: many);[13]
- Failure to accurately report hours worked to Paid Family Medical Leave insurance carrier (penalty: same as for disability—see footnote 13); and
- Failure to properly document hours worked in relation to 401k or 403b retirement benefits (if this leads to a “knowing misrepresentation” the penalty is a fine and/or up to five years imprisonment).[14]
Of course, not all these risks apply to all employer types. If a workplace doesn’t have a union, it doesn’t have the risk of a union grievance. If a workplace isn’t subject to the paid sick leave law, it can’t be fined for not following it. But every employer has an obligation to retain accurate payroll records and pay people for the time they have worked (whether they are salaried or hourly), and most employers have to follow at least half of the items listed above.[15]
The good news is that many of the responsibilities leading to penalties (like payroll recordkeeping) can be contracted out. And that is why employers use a professional payroll service and a standard system for timekeeping.
Setting up a contract with a payroll company is relatively simple, but getting employees to use the same system—especially if the switch involves new procedures—can be a struggle.
In particular, a transition to a new system can be difficult for salaried employees who don’t get paid by the hour but are expected to work a basic work week (usually set by policy). For such employees, “clocking in” can be antithetical to being a salaried professional, executive, or administrative employee; the whole point is you don’t have to punch in.
But there are many reasons for ALL employees to “clock in” (whether it is by noting their start time on a physical spreadsheet, or on the company system, or a vendor’s system). Aside from the obvious reasons the employer might have (assessing productivity), employees of all types should track their start and end times so there is a clear record of when they are working. Among other things, knowing when an employee was working is important for workers’ compensation claims for workplace injury.
In addition, it is healthy for salaried supervisors to know the experience of hourly employees; this includes using the same system whenever possible for tracking accrued sick leave, vacation time, personal time, and other days out (bereavement and jury duty being two prime examples).
When an employer is shopping for a new payroll system, it is important to know the different ways employee time is tracked and ensure the system supports those breakdowns. This is particularly important for employers that have to track sick leave and prenatal care leave[16] or for those who offer New York State retirement pensions.[17] So, basically everyone.
Once a payroll system is selected, there should be clear policy and protocol for entering time. Although it requires planning and resources, training on the new system so people know how to use it is important.
Thank you for a great question.
[1] I can hear you now: “You need a law degree to tell me to use a payroll system? What, do I need a CPA to tell me to use Excel?”
[2] N.Y. Labor Law Section 195
[3] Wage Theft Prevention Act (WTPA), Labor Law Section 195
[4] Labor (LAB) CHAPTER 31, ARTICLE 6 § 197
[5] National Labor Relations Act, N.Y. Labor Law
[6] 26 U.S.C. § 7202
[7] Tax (TAX) CHAPTER 60, ARTICLE 22, PART 6, § 685 (g)
[9] “Comp time” can only be used by government entities. For more on that, see Salaried/Non-Exempt Employees and Compensatory Time.
[10] N.Y. Social Security and Retirement Law Section 111(c).
[11] N.Y. Labor Law, Article 18, Title 9.
[12] N.Y. Workers Compensation Law Section 114.
[13] For the wide variety of penalties, see N.Y. Workers Compensation Law Article 9 (yes, disability and paid family leave are part of the Workers Compensation Law).
[14] 18 U.S.C. 1027.
[15] In addition, if there are any labor law attorneys out there, you can send me a list of what I missed to [email protected].
[16] Private employers.
[17] Public employers.
Tag:
Public Libraries, Ask HR, Salaries and Wages, Unions, Labor, Payroll
