Already one of HR executives' biggest worries, wage-and-hour compliance is taking on even greater urgency in light of the Department of Labor's recent, stepped-up Fair Labor Standards Act (FLSA) enforcement efforts, which include a toll-free attorney referral hotline and a new smartphone app.  

When it's a question of compliance, the answer is technology

Already one of HR executives' biggest worries, wage-and-hour compliance is taking on even greater urgency in light of the Department of Labor's recent, stepped-up Fair Labor Standards Act (FLSA) enforcement efforts, which include a toll-free attorney referral hotline and a new smartphone app

Employers, however, are answering technology with technology: They are implementing advanced workforce management solutions that not only help keep them in compliance with federal, state and union rules, but also track metrics to improve productivity. 

"Federal statistics show that claims and investigations against businesses regarding the FLSA have risen by more than 35 percent in three years," said Ann Shaw, senior vice president, associate general counsel for Ceridian. "Employers prevail in these lawsuits when they have a systematic process for gathering, documenting and analyzing workforce information." 
Wage-and-hour disputes accounted for 91 percent of the 4,152 employment-related class-action lawsuits filed in 2010. With the average federal class action settlement amount at $23.5 million, compliance with these regulations is not a problem employers can choose to ignore. 

That's why, according to a recent report by the research firm Aberdeen Group, more organizations are beginning to implement automated workforce management solutions. Of about 200 organizations surveyed in the report "Workforce Scheduling 2011," nearly 25 percent cite compliance with regulatory requirements as a key driver for adopting this technology. 

Guaranty Bank, a Ceridian customer, has experienced the challenges of wage-and-hour compliance firsthand. Because it has more than 1,600 employees working at more than 160 retail banking locations and a host of mortgage subsidiary companies nationwide, correctly paying overtime according to each state's laws can be complex. 

The bank's payroll manager, Cathy Thaxton, said that overtime used to be their "biggest issue" involving wage-and-hour compliance. But since Guaranty Bank upgraded to a more advanced workforce management system earlier this year, they have become more confident in their ability to be compliant. They were able to preprogram the system with the laws of each of the states in which they operate, so the correct application of rules is now automatic. "We set that up during implementation and it calculates overtime exactly the way we set it up," Thaxton said. 

Strategies for compliance

In a recent Ceridian Customer Connection webinar, Shaw and fellow presenter  
Howard Tarnoff, senior vice president and general manager of Ceridian Dayforce Workforce Management, addressed several strategies that employers can use to decrease potential wage-and-hour liability. 

"Review and revise your policies and practices," Shaw said, "train managers on compliance, and conduct an internal review of your wage-and-hour practices." You can address another key issue of FLSA compliance by auditing your list of exempt and non-exempt employees against current job descriptions to ensure all of your employees are classified correctly, she added. 

Tarnoff said, "Also, consider a workforce management solution that includes real-time compliance alerts for managers, as well as scheduling and time-and-attendance tools. These technologies empower employers to proactively ensure compliance with the complexities of both federal and state labor regulations, allowing them to better focus on the strategic necessities of the business while the system automates tactical processes. These are the benefits that truly provide business optimization." 

Benefits of automated workforce management

Just as the Department of Labor has modernized its FLSA enforcement efforts, employers are modernizing timekeeping and recordkeeping in order to keep pace. Today's workforce management solutions can benefit employers in several important ways: 

  • Reduce human error and ensure consistent application of policies
  • Centralize pay rules and automatically apply them
  • Track and compensate employees for actual hours worked
  • Increase payroll accuracy, including overtime pay
  • Alert managers to potential violations before they occur
  • Maintain detailed audit records for all employees
  • Accommodate complex labor rules, such as for unions

But as with everything else in business, employers will get out of a workforce management solution only what they put into it. "The system will administer the rules fairly, consistently and exactly as you program them," Tarnoff said. "It's vital that all applicable laws and union rules are configured correctly."