What happens when workers are blatantly cheating the system and fudging their actual “hours worked”?
Timesheet fraud is a real problem that can take a huge chunk out of employers’ bottom lines – especially those in industries and jobs where it’s easy for workers to cheat.
Plus, the DOL’s new OT regs will likely see a lot of formerly exempt employees punching a timecard for the first time in their careers. And resentment for having to do this may lead some staff to take some liberties with their timekeeping.
When is it stealing?
One of the best ways to prevent timesheet fraud – also known as wage theft – is to be aware of the various ways that employees can engage in fraudulent timekeeping such as:
- engaging in personal activities outside normal breaks while on the clock
- coming in late but recording it as “on time”
- recording time falsely for another employee, or
- taking an extended meal break but recording less time.
The good news is there are plenty of steps and safeguards employers can take to prevent timesheet fraud. Here are some of those steps, courtesy of labor attorney John K. Skousen:
Create a written timekeeping policy with instructions on the obligation of honest timekeeping and different bans against fraud.
Train managers on how to capture work time accurately as well as on all relevant wage and hour laws.
Include a managerial review process for all timesheet submissions (without this it’s more tempting to cheat).
Set up a system where the labor budget is fixed for each job so variances are easily to spot.
As CFO Daily News has covered previously, the proposed overtime regs would increase the current minimum salary amount to $970 per week or $50,440 per year.
Under the current FLSA regs, the minimum salary a worker must be paid to be exempt from overtime is $455 per week or $23,660 per year. The agency calculated the new minimum salary would equal the 40th percentile of weekly earnings for full-time salaried workers.
In addition, the proposed regs also would tie salary thresholds to an automatic-escalator for the first time ever. The feds have proposed using one of the following two methods to automatically bump up the thresholds:
- keeping the thresholds tied to the 40th and 90th percentile of earnings, or
- adjusting the amounts based on changes in inflation by tying them to the Consumer Price Index.
The new regs would also bump up the highly compensated employee threshold — from $100,000 to $122,148. The new amount is the 90th percentile of workers’ weekly earnings.
The final regs were officially slated for release in early 2016, but now the DOL appears to be aiming for the summer as the release date for the final regs. In the agency’s fall 2015 regulatory agenda, the DOL wrote that it’s targeting a July 2016 release date.
Granted, this is still just an estimated release date (nothing is official), but it does provide some insight as to where the DOL’s at with the rules.