Time Shaving Abuses

President of Datamatics comments on front page article in The New York Times

Fords NJ (PRWEB) April 7, 2004 -- Documentation is the best defense against the payroll abuse known as time shaving. So said Norman Heinle, President of Datamatics, Inc. in response to a front page story in The New York Times dated April 4, 2004 which detailed recent instances of time shaving at a number of leading companies.

Time shaving occurs when managers reduce the number of hours worked by employees, sometimes with a few quick keystrokes on a computerized record. According to the Times article, time shaving has occurred over the last few years in several well known businesses, including Toys R" Us, Pep Boys, Taco Bell, Wal-Mart, and Family Dollar. Such conduct is patently illegal, and the companies profiled in the story had policies in place forbidding the practice.

What causes this increasingly common problem is the intense pressure on managers to control costs and increase productivity, especially in industries that are historically low margin. Adding to this pressure are compensation systems that have become more bonus-based. These programs pit the personal interests of supervisors who are in the bonus pool against the income needs of the workers whom they manage.

The real issue here is management," Heinle explained. Effective management is fostered by documentation that is both thorough and adequate." Disagreeing with suggestions in the Times article that a return to manual time clocks and paper records would eliminate time shaving, Heinle pointed instead to the many ways in which automated time and attendance systems can be used thwart payroll abuses on each side of the equation.

Collusion by frontline supervisors to shave time can occur where the corporate culture encourages looking the other way as long as the financial results are good," he explained. But an automated system that generates audit trails showing what changes were made to time records and who made them raises the stakes for unethical managers."

An automated solution also provides senior managements with a compliance mechanism for meeting labor law provisions, as well as a business record" which can serve as a crucial support in actual or threatened litigation. Heinle recommends periodic audits and independent reviews as additional checks to insure that individual managers are not making excessive or irregular edits to the hours worked recorded by employees.

Of course, payroll fraud is a two way street. Padding hours is just as serious as paring them, says Heinle. Businesses have a very legitimate need to protect against inflated hours worked claims, violations of work rules, and unnecessary overtime. An automated time and attendance system can be extremely effective in achieving these goals, Heinle explained. Applying work rules programmatically to employee time that is captured electronically creates an objective record and eliminates the mistakes and inconsistencies encountered in manual record-keeping.

Heinle also noted that many of the workers mentioned in the Times article did not have access to their electronic records. Providing hours worked data, either on line or on payroll check stubs, is a step he also recommends as a prophylactic measure to curb time shaving.

Datamatics Management Services, Inc. is a New Jersey-based software developer and management consulting company. Datamatics TC-1 Labor Management Solution is a leading software package used in thousands of businesses, including QVC, Jet Blue, and Armed Forces Savings Bank. TC-1 automates employee scheduling, attendance record keeping, benefit accrual tracking, and cost allocation. TC-1s open architecture and scalability provide single source, enterprise and web based solutions to the many challenges of managing people and controlling costs.

Datamatics also provides outsourced consulting and training options for a variety of business needs. Our expert services are customized to clients specific needs, providing management, financial, IT, and personnel solutions, as well as the metrics for measuring the success of our efforts.

To learn more about Datamatics, visit our web page at www.datamaticsinc.com

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