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We’ve compiled a list of the 100 most commonly asked questions we have received on the federal Fair Labor Standards Act (FLSA) overtime regulations.
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This report, "Top 100 FLSA Q&As", is designed to provide you with an examination of the federal FLSA overtime regulations in Q&A format, including valuable tips for bringing your workplace into compliance in an affordable manner.

At the end of the report, you will find a list of state resources on wage and hour issues. This report includes practical advice on topics such as:
  • FLSA Coverage: How FLSA regulations apply to all employers and any specific exemptions from the overtime requirements
  • Salary Level: Qualifying for exemptions and nonexempt employees
  • Deductions from Pay: Deducting for violations, disciplinary reasons, sick leave, or personal leave


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December 10, 2007
Workforce Management Systems Reduce Payroll Costs
All businesses experience variations in the workload, but none so much as retail. If you're in the retail business, you know the frustration: you prepare for a busy time by bringing in extra staff, but shoppers fail to show up. Or, you expect a slow Sunday afternoon but soon have irritated customers waiting in long lines for service because you haven't brought in enough help. Both situations affect the bottom line--you're either spending too much on payroll, or you're losing sales.

What if you could avoid all that, by simply managing your workforce better? You can, say the experts at the Aberdeen Group (www.aberdeen.com), a leading provider of fact-based research and market intelligence. They recently asked retailers how they manage their workforces, and found that turnover is one of the leading factors driving retailers toward workforce management (WFM) systems. Aberdeen's research analyst, Sahir Anand, says, "Staffing is an issue that impacts more than 60 percent of the retailers that we surveyed."

Aberdeen's report, "Automated Workforce Management Means Better Performance," is available through the company at www.aberdeen.com/summary/report/benchmark/3979-RA-Automated-Workforce.asp. It reveals that 80 percent of the retailers Aberdeen considers "Best-in-Class" have either improved or met their labor turnover rate goals as a result of improved WFM processes. The companies at the bottom of the results pile, referred to in the report as "Laggards," assign and manage 90 percent of the tasks at the retail store largely on paper, with little or no automation, says the report.

High turnover provides motivation to automate

Workforce management systems allow companies to maximize efficiency in several areas. "These include time and attendance, labor scheduling, workforce optimization, forecasting, etc.," says Anand. "Interestingly enough, we also found that all the factors leading companies towards workforce management solutions, or improvement of existing workforce management solutions, were borne out of high turnover rates. The pressure of high turnover was, in fact, the number one pressure forcing companies towards workforce management solutions."

Ian Baxter, Director of Marketing at WorkPlace Systems (www.workplacesystems.com) agrees. "In the retail and hospitality industries, there is a high turnover of staff, be they casual, part time or full time ­ sometimes in excess of 60 percent in a year. This creates a huge issue and cost for organizations, both in the cost of recruitment and the achievement of high and consistent service levels ­ both of which have an impact on profitability and sales," he says.

By automating the system for scheduling employees, Baxter explains, WFM reduces employee turnover, in turn reducing payroll costs. An automated system allows managers to take into account employee preferences and availability when scheduling work shifts, which contributes to work/life balance. And when employees have access to a self-service scheduling system, where they can request holidays and other time off, or swap shifts with coworkers, employees have more of a sense of being part of the team.

"Kiosks also ensure that an employer has a fully manned schedule, and the employees have the flexibility to meet both their personal and work obligations," Baxter says. "As the kiosk is secure, the employees can also change personal details such as bank account and address, as well as get a view of their current pay-to-date, overtime, or remaining hours to be worked. A WFM system allows a fair and reasonable allocation of overtime, so that one employee is not favored over another."

Store managers and HR professionals also appreciate the capabilities of a WFM system, because of smoother processes and increased efficiencies. "They allow for accurate, timely and correct pay of staff through precise recording of attended hours, with the correct rounding rules applied for lateness and overtime," Baxter says. "They also allow for immediate feedback and handling of exceptions by management when an employee is late or fails to show up," he adds.

Personnel planning simplified with WFM

"A WFM system introduces a level of predictability and accuracy in forecasting, for manpower planning and labor budgeting," says Baxter. Such a system allows for creation of schedules based on actual workload demand. "This means one can minimize overtime and overstaffing, both of which result in a direct waste of labor costs," he explains.

Managers can more accurately predict which types of employees will be needed during any given period. For example, you might employ part time, full time and casual employees, who have a variety of skills. "Recruiting and then scheduling them properly can mean you don't need to schedule a higher paid and higher skilled employee for a job which requires less skill," notes Baxter. This information can be helpful to HR, for their understanding of workload demands. "It's a way to provide accurate guidance to HR regarding the type of employees required in terms of their skill set, helping to recruit the right employees."

Time and attendance software is one aspect of a WFM system with which most HR professionals are acquainted. Through such a system, says Anand, staffing levels and requirements can easily be tracked and quantified. Components like web-based time clocks allow for sales and staffing forecasting for each store's requirements.

"These solutions are really required for the times now," Anand says. "Payroll costs can easily get out of hand when there is over-utilization of labor, when there is a lack of control. The lack of control often comes when you're using a legacy time and attendance system, where employees punch in and punch out on time clocks, which are typically located in the back office of the store. Employees may miss punches, or are punched in or out by a coworker. These problems also result in situations where overtime is not managed effectively, creating more staffing and budgeting problems."

A WFM system can help you create fair and reasonable work schedules, where employees who want overtime can be the first assigned to it, or it can be shared equally among employees. In contrast, those who desire to work fewer hours can be first to be taken off the work schedule during slow periods, or all workers can share equally in the time off. Baxter says that a properly implemented WFM system also gives companies the ability to thoroughly understand their staffing needs. "By analyzing work completed during attended hours, companies can identify process bottlenecks and inefficiencies, thereby increasing employee productivity," he says. "That alone could remove the need for overtime."

Make sure systems work together

Retailers appreciate the need for WFM solutions, according to the Aberdeen report. Sixty-three percent of respondents plan to spend money on a WFM solution in the next year or two. If your company is among them, Anand suggests you make sure the solution you choose integrates your processes company-wide. The Laggard companies in the Aberdeen report may have had WFM solutions in place, but often, the systems did not work with one another and so failed to live up to their promises. "Average and Laggard performance is not matching up to the standards of Best-in-Class companies due to manual workforce procedures, lack of WFM analytics, and fragmented WFM solutions," he said. "This fragmentation is essentially due to several non-integrated WFM solutions deployed within the enterprise that lead to flawed interaction of labor, sales volume and customer traffic data for long-term labor forecasting and planning purposes."

Remember: Best-in-class companies eliminate workforce inefficiencies through automation, saving money on payroll and easing the frustrations of poor scheduling. Problem solved.

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