They provide key evidence and can help companies avoid various types of lawsuits.

In one recent case, an employee sued after she was fired for missing too many days of work without authorization.

She claimed her most recent string of absences was because of a medical condition, meaning she should’ve been protected under FMLA.

But when she requested FMLA, the company looked through her payroll records. It turned out, she’d only worked 1,248.8 hours in the previous 12 months — making her 1.2 hours short of FMLA eligibility. So the company went through with her termination.

In court, the judge agreed with the company’s decision. The law’s the law, and the employee wasn’t eligible for FMLA protection.

Cite: Pirant v. U.S. Postal Service.

An employer asked the DOL about this situation:

Employees are offered an optional training course on a computer application they use to do their work. Everyone is already trained on the basics and has enough skills to perform their duties. But the optional course provides advanced knowledge, which lets them work more efficiently.

The training includes online courses employees are expected to take at home on their own time. Most of the employees taking the course are nonexempt — do they need to be paid for what they do at home?

The DOL’s answer: Yes.

Time spent attending training doesn’t have to be paid if all of these criteria are met:

• the training occurs outside the employee’s normal working hours
• attendance is voluntary
• the information learned is not directly related to an employee’s job, and
• the employee doesn’t do any work during the session.

In this example, the training was directly related to how employees did their jobs — it helped them perform their work more easily — so the time had to be paid.

It could save a big chunk of money in the event of a wage and hour lawsuit.

In one recent case, a group of employees were classified as exempt. They were then given new job titles and switched to nonexempt status.

The problem: Their positions changed names, but their duties stayed the same. So the employees sued, claiming they were owed overtime for the period before the change.

After failing to have the case thrown out, the company offered to settle. It estimated how many hours of overtime the employees had worked and came up with an appropriate dollar amount.

But a court rejected the settlement offer. The reason: Without a record of the hours the employees actually worked, there was no way for the company to prove it was offering the correct amount. In the court’s view, that meant the employees could potentially be owed a lot more than that.

Now the case will move forward, and the employees will be able to ask a jury for an award based on their estimate of the hours they worked.

Cite: Davis v. Abercrombie & Fitch Co.

Whichever way companies choose to track employees’ time, a recent case makes one thing clear: They must keep accurate records — or take a big hit in court.

A woman sued her employer, claiming she worked overtime that was never paid.

Could she prove this? Well, she didn’t have any proof she ever worked more than 40 hours a week, and she couldn’t even name specific times when she allegedly worked overtime.

Her case was thrown out, right? Wrong.

Turns out, the employee did have evidence that the company didn’t keep accurate records of the hours employees worked. The woman managed a store and had the only set of keys — therefore she had to be there to open and close the store.

But on some days, company records showed her coming in after the store was open and leaving before it closed. She claimed she was there but that her boss submitted inaccurate attendance information.

Normally, it’s up to an employee to prove he or she worked overtime and didn’t get paid. But in this case, the court ruled, doubt was cast on the accuracy of the company’s own records.

Therefore, the company had the burden to prove no overtime was worked — which it couldn’t do. The woman’s complaint will now lead to a costly jury trial or an expensive settlement.

Time must be accurate, however it’s tracked

Employers have a lot of options when it comes to tracking the hours employees work.

Whatever the method used, managers must be trained on the importance of accurate tracking and documentation.

Failing to keep solid records violates the Fair Labor Standards Act — and leaves the company helpless if an employee makes a claim about unpaid time.

Cite: Brown v. Family Dollar Stores of Indiana, LP

Basically, the technology replaces the old punch clocks (and even older paper time sheets). Instead of inserting a card, employees press a finger or palm to a scanner when they come to work or leave for the day. The system keeps track of the time for payroll.

The point is to streamline the timekeeping process, and to keep employees honest (since there are no time sheets to falsify and no way of having a co-worker punch in for you if you’re late).

Apparently, some big companies like Dunkin Donuts and Hilton hotels are already on board.

But will it catch on? Who knows. First of all, it probably doesn’t need to be mentioned that these systems are expensive. It might be worth it if you’re keeping track of a lot of employees who commit a lot of timekeeping fraud, but at most places, things may not be that complex.

Also, there’s already been a backlash from employees at companies where these systems have been implemented. Installing such an extreme fraud-proof system certainly sends a message of mistrust, and firms may find that the negative psychological effects outweigh other benefits.

What do you think? Does your company use biometric devices, or are you thinking about using them? Give your opinion in the comment box below.

A new study should give companies some help making their case.

Switching from manual to electronic T&A (via, computer- or Web-based software, timeclocks, etc.) gives companies a significant benefit, according to a survey from Nucleus Research.

In the companies interviewed after making the switch, the biggest benefits were:

1. Productivity boost

Automation makes the process easier for everyone involved — employees don’t have to spend time filling out timesheets, managers can approve attendance information more quickly and payroll no longer has to manually collect, check and transmit the data from paper records.

The bottom line: Everyone has more time to work.

2. Fewer errors

On average, the companies surveyed saw payroll errors decline by 1.2%. Going electronic significantly reduces the possibility of human error.

3. Better control of overtime costs

When employees submit their hours at the end of every pay period, managers often don’t know much time everyone’s worked so far in the current week.

With electronic tracking, managers can keep tabs on who’s in danger of incurring overtime and assign extra work for the week to those least likely to exceed 40 hours.

4. Elimination of paper costs

The final benefit is simple: You don’t have to spend money on paper.

Companies with a manual process spend an estimated three cents for every time sheet. Multiply that by the number of employees and pay periods, and you’ll have an idea of how much you can save.

To download a PDF of the report, click here.

One method many organizations are turning to: technology known as Interactive Voice Response (IVR).

IVR has many uses, one of which is allowing employees to use their phones to track hours worked, instead of a traditional time sheet or clock.

Basically, instead of punching in and out on the clock, the employee dials a number and tells the system to clock him or her in.

Who uses IVR?

IVR time clocks benefit many companies, especially those that:

• have employees who travel a lot (most systems let employees use a cell phone to access the system)
• have several locations (all data can be centralized without having to send paper records to one location), or
• use workers on a contract basis (those workers can clock in and out when they arrive at or leave a client’s location).

That goes for electronic time and attendance tracking, too.

Here are three things companies must do to help ease the transition from a manual to automatic process:

• Stress how it benefits them — Instead of explaining how much money it’ll save the company or how it will make things easier for HR or management, stress the ways employees will benefit. For example, the system could reduce errors that leave them underpaid and eliminate the need to manually add up the hours every two weeks.
• Get them involved early in the process — When viewing demos for a new system or designing one in-house, it’s important to get the opinion of every affected party — that includes employees and managers. That will help you develop a system that works for everyone and aid the transition.
• Train employees — For any new technology project, training is a must.