Avoid Payroll Violations with Electronic Field Logs

Read the article in the UCANE Construction Outlook magazine - page 57

December 2020

By Greg Norris, B2W Software

 

Trading timecards and spreadsheets for software to track labor hours makes it easier to get the numbers and the rate classes right

 

Real-time data from the field to keep projects profitable is the top reason contractors step up from paper timecards and spreadsheets to specialized software for field tracking, but there’s another financial benefit too.

 

Recording daily performance, including labor hours, with electronic field logs makes it easier to get payroll right and avoid costly penalties.

 

Payroll errors are not taken lightly. Attorneys General throughout the U.S. recoup millions of dollars in fines and back wages every year from businesses that violate the myriad of payroll laws that vary from state to state. Whether the payroll errors are intentional, inadvertent, or even careless mistakes by a payroll clerk, most states (including Massachusetts) can still consider the error to be a violation subject to penalties.  The construction industry has some very high hourly wages and more complicated payroll classifications than most industries, especially when performing prevailing wage work. These facts often make contractors a target for AG’s looking to enforce payroll regulations.

 

Laws regulating prevailing wages, overtime, benefits and other labor issues protect workers but present administrative headaches for contractors. Recording and classifying hours precisely in a fast-paced and dynamic environment is hard. That’s true even for construction companies with the best intentions. Outdated processes that rely on paper, spreadsheets and occasional guesswork don’t help.

 

Capturing how many hours employees work is step one. Specialized software prompts supervisors to enter regular, overtime, double time and any special circumstances in a structured, consistent manner. Experience proves they are more likely to record and verify hours each day with user-friendly electronic logs than with timecards or spreadsheets. The daily cadence, when information is fresh, is far more accurate than waiting until the end of the week, rushing to meet a submission deadline and trying to recall what happened days ago.

 

Automated error checking with a software system helps too. Missing hours, individual hours that don’t match total hours for a crew, hours for the same employee on two different logs simultaneously and other common mistakes will trigger an alert. The software can require a correction before the log can be submitted. Electronic signatures, time stamps and GPS capabilities validate when, where and by whom hours were recorded and approved. These features further limit accidental or intentional errors.

 

Logging the pure number of hours worked is usually the easy part of payroll processing. Classifying hours correctly according to the jobsite and type of work performed is harder. As the number of employees and the scope of work grow, this challenge increases proportionally.

 

The degree of difficulty multiplies further when workers fill multiple different roles or work on both public and private projects or deploy to more than one state – sometimes in the same week or even on the same day. Employees in these scenarios that work independent of a supervisor and crew, such as a transport driver or an equipment operator, add yet another layer of complexity.

 

A utility contractor may have a worker who installs pipe one day and is a laborer the next. An employee could operate an excavator on a state DOT project for six hours and then leave the site and spend two hours moving that machine to a private jobsite. A mechanic or welder might work at sites in two or three states with different prevailing wage scales over the course of a week.

 

Coding hours correctly in situations like this is tricky, but software improves accuracy. Contractors can build a specific, limited number of labor rate classes into a particular field log. Drop-down menus then make it simple for supervisors to view and select from these options when they assign hours. Limiting the available labor types to only those relevant to the employees and the work associated with a specific project makes it harder to make mistakes.

 

Supervisors in the field are spared from searching through dozens or hundreds of labor codes in a book or spreadsheet and trying to decide which one to use. The electronic log also minimizes entering codes incorrectly or illegibly, which happen more often than most contractors want to admit.

 

Accounting departments catch mistakes often but not always when they certify payroll. Inefficiency and opportunities for error go way up, however, when people in the office and the field have to exchange emails, text messages and phone calls to clarify hours. Coding accurately and immediately in the field eliminates this chaos. Electronic data transfer directly from the electronic field log to the accounting system further streamlines the process, minimizing redundant data entry and the accompanying chances for mistakes.

 

Finally, if disputes, audits or investigations over labor hours come up, software-based field tracking systems provide another clear advantage. Contractors can go back a month, a year or many years with just a few mouse clicks and get a detailed, valid record of exactly what happened on a jobsite on a given day. With paper logs or timecards, they could spend hours or days pouring through files for information that may not even exist or prove very accurate.

 

Solving mechanical and logistical challenges in the field drives success and motivates supervisors in heavy construction. “Paperwork”, including tracking labor hours, can understandably be seen as a distraction from hands-on execution. The switch from old-school paper timecards or spreadsheets to electronic field logs minimizes this administrative burden and helps contractors record hours accurately, pay employees properly and steer clear of costly payroll violations.

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