3 Ways to Save $1,000’s on Employee Labor

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Employee wages and benefit expense is the highest cost for most businesses. This cost continues to rise as new laws create increased mandatory time off, paid family leave, and higher minimum wage.

Now more than ever, employers seek for a balance between remaining profitable, and in business, and providing the best benefits and wages to valuable employees.

One of the best ways to do this is to eliminate wages for unworked labor.

When employees estimate punch times, they usually estimate wrong. Employees often don’t remember or don’t account for arriving late or leaving early. They often don’t realize how the extra few minutes at lunch turned into an extra 10. All of this costs you money in labor that was never realized.

If you’re not using a time clock, you are paying too much for employee labor!


Payroll Errors Cost Employers Money

The American Payroll Association estimates that the rate of human error in time card preparation is between 1% and 8%.

These errors can happen with typos, innocent slips or memory lapses regarding the exact times employees started and ended work.

In addition to the type of errors that cost employers additional money in wages, there is an administrative cost to errors.

These costs are shown in the time and money it costs to re-issue paychecks, re-processing fees, administrative time and more.

The Cost:  A conservative 2% human error rate on a $12,000 payroll would equal $240 in erroneous wages paid per pay period.  

Moreover, the cost to re-issue correct payroll amounts (if the error is detected and reported) further increases your cost of human error.

Employee Punch Cards Cost in Administrative Wages

The average payroll clerk spends 7 minutes per time card each pay period:

  • Preparing and handling time cards
  • Verifying time card totals
  • Computing time card totals
  • Computing shift and dept. totals
  • Reconstructing lost/damaged cards

The Cost: Preparing 100 time cards takes an estimated 11.67 hours to complete.  At an average clerical wage of $15.00 per hour, time card preparation would cost $175.05 per pay period.

This time could be eliminated and could free up your Human Resources and Payroll staff for other more effective processes.

Accidental Employee Time Theft

Employees knowingly and unknowingly often steal time from employers.

This can come in the form of untracked breaks, extended lunches and over-approximated punch times.

Did you know that just 15 employees receiving pay for merely 4 minutes of “wasted” time per day will total 1380 minutes of additional pay per month? That’s an additional 23 hours!

The American Payroll Association estimates that employees steal an average of 4.5 hours each week. That’s according to surveys of employees.

The actual time could be much more than employees will even admit on a survey.

4.5 hours per week for 15 employees equal 72 hours in a 4 week period.

The Cost:  If your average pay rate is $10.00 per hour, then you pay an extra $230.00 each month for labor worked. That’s only for 12 minutes of wasted time per week per employee.

That cost multiplies if you account for an average wage loss of 4 and a half hours a week per employee!

Buddy Punching is Expensive

When late or absent employees try to escape notice by employers, they turn to buddy punching. Buddy punching is when a coworker punches in for an employee who is not present. It is illegal and unethical, but it costs employers millions of dollars in unworked wages.

It also affects 75% of all employers.

Buddy punching decreases return on investment, productivity, and decreases the profits of businesses.

It also reduces the employer’s ability to add more benefits for their employees.

Buddy punching costs employers approximately 7% of their total payroll costs.


Recover Overpaid wages

Even through employee labor is among an employer’s greatest expenses, there are ways to reduce expenses. Automated timekeeping helps to reduce costs many ways.

Automated timekeeping can help to reduce overtime costs. Alerts go out to managers when overtime thresholds are encroaching.

Managers can see current times and manage employees who are clocked in on overtime hours. They can also manage those who consistently clock overtime hours.

End Buddy Punching and Time Theft

Through biometric time clocks, employers can end buddy punching. Biometric clocks ensure that employees are physically present when they clock in.

Employers in some states should take extra steps to stay compliant. New York employers can use hand geometry time clocks, but cannot force employees to use biometric clocks that scan fingers.

Illinois employers must notify employees and disclose the use of biometric information before implementing clocks. These employers are still allowed by law to use biometric time clocks after following state guidelines.

SwipeClock biometric time clocks do one of two things to identify the individual.

Finger scan: The employee places their finger on the clock. It scans the fingertip and uses a hash to identify specific points.

The finger scan is not stored in the clock or software. The clock matches the hash to the employee’s finger to identify them. Finger scans cannot be recreated from the hash. All biometric information is automatically deleted when the employee is terminated in the timekeeping system.

Hand Geometry: The hand geometry time clocks measure the employee’s finger length and width. It does not scan the surface area of the hand. As a result hand geometry time clocks are legal for employers to require employees to use in New York.

Eliminate Overhead & Administrative Time

Small business owners often have smaller margins than larger companies. As a result, reducing overhead costs can be vital to growth.

Large employers can save thousands each month by reducing payroll overhead and administration time.

Automation is more effective than outsourcing.

Take the pain out of collecting time and preparing payroll! Turn tasks that take days days into only hours and minutes.

Automated timekeeping allows managers to track hours, manage overtime, track holidays & time off requests. Employees can view accruals balances, employer  notifications, and manage personal information through an employee self service portal.

People make mistakes, so tracking this stuff usually results in costly errors and time. Automated timekeeping will simplify the process and change how you do business.

Preparing time card data for payroll takes a few clicks when time keeping is automated.

Whether it’s the convenience of gathering punch data in a fraction of the time or simply minimizing the cost of human error, with automated timekeeping submitting payroll doesn’t get much easier!

Compliance Fines Kill

Employers in New York City who failed to properly comply with the new sick leave law were fined over $800,000 in only 4 months of 2016.

An Oregon restaurant failed to pay $30 for a working interview and ended up paying $30,000 in fines for non-compliance.

Mandatory sick leave laws, local minimum wage ordinances, and secure scheduling laws are only a few of the employee-wage related laws that employers must be aware of and track.

These laws require tracking of employee hours for accrual purposes. They require employee location tracking for minimum wage compliance. They also require planned schedules to be posted and employee input and requests for specific schedules.

Employers who do not automate timekeeping and payroll often find themselves hiring additional positions to manage the overhead and documentation these laws require. Plus, they are more likely to be found non-compliant.

Unfortunately, many employer laws require proof of compliance from the employer or the law assumes employer guilt. SwipeClock’s software tracks, retains, and helps employers to stay compliant.

Let WorkforceHub Help

Our Workforce Management Suite is Simple and Affordable and will save you $1,000’s per year. 

Businesses who use SwipeClock workforce management tools and software find that employee wage expense is optimized through intelligent employee scheduling. Overtime is reduced and employment laws are complied with easier.

Additionally, these businesses can eliminate buddy punching through our biometric clocks and can track employee locations through our geo timekeeping clocks.

Simplify HR management today.

Simplify HR management today.

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