Whitepaper

Reducing Labor Compliance Risks

Using Workforce Management to Keep Compliance Under Control

Oftentimes, an organization does not seriously consider the complexity of regulatory compliance or its potential impact until it becomes a problem. Complaints to regulatory bodies are more common than perceived, and are usually upheld following an investigation. Between October 2007 and June 2011, the U.S. Department of Labor collected over $680,000,000 in back wages and assessed over $34,000,000 in civil monetary penalties across 1,634,668 separate case violations. In 2008, it took 97 days on average for the Department of Labor to resolve a regulation compliance investigation. About 78 percent of those that included investigations of FLSA violations were found to be legitimate and resulted in citations. These risks to time, capital and reputation are often unintentional and easily avoidable. The most common FLSA violation in 2008 was the payment of straight-time pay for overtime hours worked, and similarly large numbers of citations were issued for failure to pay employees for all hours worked.

The Global Picture

Globally, the situation is more complex; modern organizations need to consider international standards in addition to the multitude of local and national laws in any number of countries. In the U.K., for example, while employers are permitted to ask employees returning from sick leave to provide proof of fitness to return to work, they are required to ask for a Statement of Fitness to Work for any sick leave period that exceeds seven days. Whether such doctors notes are company policy or national law, SumTotal Workforce Management, formerly CyberShift Workforce Management 3G, can help your organization collect and organize such documentation through a robust absence management system that allows employees and supervisors to attach files directly to absence requests. Wage regulations vary widely from market to market as well. Even minimum wage requirements, which seem simple at first glance, can become quite complex for the global-minded manager. For example, in the U.S., most employees are entitled to at least the one national minimum wage, with some notable exceptions (e.g. waiters tips do contribute), while in the U.K., there are four minimum wages based on age, with tips are not counted toward the minimum. SumTotal Workforce Management can rein these complications in with a Time & Attendance system that allows multiple levels of rate configuration, set by employee, date, work type and more, like proving rate premiums based on time of day.

SumTotal Systems acquired CyberShift in 2011 as part of our complete Human Capital Management solution. CyberShift was the leading provider of workforce and expense management software and services, focused on improving organizational performance and profitability. CyberShifts products are part of SumTotals fully supported core pillars.

The most common FLSA violation in 2008 was the payment of straight-time pay for overtime hours worked.
Source: The U.S. Department of Labor

www.sumtotalsystems.com

Reducing Labor Compliance Risks: Using Workforce Management to Keep Compliance Under Control

And in all markets, even those with less strict regulations, employers must maintain labor standards consistent with their own internal ideals, or they risk damaging public perception, employee morale and relations with increasingly global trade unions, consumers and business partners.

Managing Your Workforce to Reduce Risk

Using a robust Workforce Management solution, an organization can reduce the risk of compliance violations, maintain morale and stay responsive to any compliance issues that do arise. SumTotal Workforce Management helps ensure that the organization stays within regulatory compliance by managing and tracking break times, pay rules, overtime and approvals. Using a combination of employee sign-off and supervisor approvals keeps everyone informed whenever any changes are made, ensuring that any inconsistencies are resolved before the records are even sent to payroll. And there is no need to leave anything to chance; SumTotal Workforce Management helps ensure that organizations faced with regulatory complaints have accurate historical records to properly and promptly respond with the necessary data.

Consistency and Automation

Even basic automation and record keeping would help prevent many of the inaccuracies that lead to the most common regulatory violations, such as failure to pay overtime or pay for all hours worked. The ability to report on scheduled time, worked time and breaks helps organizations stay within compliance consistently by identifying issues before they become problematic. SumTotal Workforce Management helps organizations stay within regulatory compliance by facilitating the following tasks:

Tracking meal and break times, and reporting on any

exceptions

Regulating and tracking overtime pay Employee- and supervisor-level approvals Managing and reporting on scheduled work time Managing and reporting on actual work time Pay rule management Accurate Records
Most regulatory compliance complaints are resolved in favor of the reporter. Proper record keeping and audit history, such as those offered by SumTotal Workforce Management, equip organizations with the tools they need to recognize issues early and defend themselves against invalid complaints. SumTotal Workforce Management helps organizations respond to disputes with historical record keeping, audit histories and reporting tools that make it easy to organize all available information. Employee sign-off and supervisor approvals help prevent record inaccuracies and incorrect payments by ensuring that all relevant parties verify the accuracy of recorded work time, and alerting those involved when any changes are made

www.sumtotalsystems.com

Reducing Labor Compliance Risks: Using Workforce Management to Keep Compliance Under Control

to previously approved time. By keeping employees involved in the approval process, organizations will not only reduce risk, but increase transparency and maintain employee morale. SumTotal Workforce Management also helps organizations maintain employee information required by regulations such as the FLSA:
Implementing the SumTotal Workforce Management solution has enabled us to better manage our workforce, reduce costs and empower City employees to be more productive. We can forecast staffing issues, track by shift, uncover trends, and take a proactive approach in managing our workforce all of which contributes to maintaining and improving service levels for the residents of High Point. Tom Spencer Systems Project Administrator, City of High Point

Name, Address, Gender and Occupation Pay rules Pay rate Hours worked each week, including overtime Additions to or deductions from the employees wages
each week

Addressing These Challenges

SumTotal Workforce Management helps optimize an organizations labor compliance by encouraging and maintaining automation, one-time configuration, direct employee involvement, high employee morale and accurate record keeping. Wherever an organizations employees live and work, labor compliance is a growing concern, and SumTotal Workforce Management can help you keep it under control with the following:

Configuration Manage employee information, pay

rules and default schedules by groups or individually to ensure accuracy and consistency across the workforce.

Automation With most standard processes occurring

automatically, employees and managers need only address exceptionsless time at the timesheet means more time on the job.

Accuracy Historical records for all employees work

and break times, change auditing and approvals at both employee and supervisor levels help ensure the accuracy of all recorded time.

Reporting Easy access to the information you need

organized, as you need it, makes it easy to identify and call out issues before any problems actually arise. SMBs and Enterprise-level companies alike are faced with daily challenges in effectively coordinating and managing their workforces. SumTotal Systems has experience in supplying workforce solutions across all industries, many of which face some type of compliance regulation. Tapping into our resources will give you a greater opportunity to use yours and avoid possible penalties.

www.sumtotalsystems.com

Reducing Labor Compliance Risks: Using Workforce Management to Keep Compliance Under Control

More Information
For more information, send an email to connect@sumtotalsystems.com

About SumTotal
SumTotal Systems, Inc. is the global leader of strategic Human Capital Management (HCM) solutions that provide organizations with a new level of visibility to help make more informed business decisions and accelerate growth. Recognized by industry analysts as the most complete solution, SumTotal provides full employee lifecycle management, including a core system of record, from a single provider for improved business intelligence. The company offers customers of all sizes and industries the most flexibility and choice with multiple purchase, configuration, and deployment options. We have increased the performance of the worlds largest organizations including Sony Electronics (NYSE: SNE), AstraZeneca (NYSE: AZN [ADR]; London: AZN), Amway (KUL:AMWAY), Seagate (NYSE: STX), Dell (NASDAQ:DELL), and Google (NASDAQ:GOOG). For more information, or to request a demo, please call +1 (866) 768-6825 (US / Canada), +1 (352) 264-2800 (international) or visit www.sumtotalsystems.com

Corporate Headquarters
SumTotal Systems, Inc. 2850 NW 43rd Street Suite #200 Gainesville, FL 32606 USA Phone: +1 352 264 2800 Fax: +1 352 264 2801

EMEA
SumTotal Systems, UK 59-60 Thames Street Windsor, Berkshire United Kingdom, SL4 1TX Phone: +44 (0) 1753 211 900 Fax: +44 (0) 1753 211 901

APAC
SumTotal Systems India Pvt. Ltd. 7th Floor Maximus Towers Building 2B, Mind Space Raheja IT Park, Cyberabad Hyderabad, AP-500081, India Phone: +91 (0) 40 6695 0000 Fax: +91 (0) 40 2311 2727 2012 SumTotal Systems, Inc. All rights reserved. SumTotal, and the SumTotal logo, are registered trademarks or trademarks of SumTotal Systems, Inc. and/or its affiliates in the United States and/or other countries. Other names may be trademarks of their respective owners. 12_0125LS

www.sumtotalsystems.com