Business Q&A: Mismanaged attendance software can lead to liability

Q: There's been a dramatic increase in lawsuits filed by employees alleging wage and hour violations associated with time and attendance software programs. What exactly are the claims against employers?

A: The lawsuits filed against employers stem from the employers' alleged failure to pay for meal breaks that were missed or interrupted because of work performed by employees during that time. Employees are claiming that employers are using software programs that automatically deduct their time for meal and break periods and then fail to reconcile these deductions if and when work is performed during the specified period.

Q: So how do “auto-deduct” policies work, and how common are they in the workplace?

A: “Auto-deduct” policies automatically deduct a set amount of time from each employee's paycheck. The deductions reflect the amount of time the employee is required to take for meal and other break periods. Although time is automatically reduced, many employers implement policies for overriding the automatic deductions to ensure that payment is made to employees when breaks are either missed or interrupted. These programs are becoming more and more prevalent as employers continue to transition to computer timekeeping systems. Like all electronic timekeeping programs, auto-deduct programs provide consistent and efficient time management. The programs are reliable and useful tools for employers to manage their employees' time. Problems arise, however, when override policies do not exist, are discouraged by management or simply not followed by the employer.

Q: Are individual lawsuits the only thing employers should be concerned about?

A: No. Lawsuits against employers stemming from issues associated with time and attendance software programs often involve complaints that automatic deductions failed to recognize if and when work was performed by all employees. Therefore, under the Fair Labor Standards Act (FLSA), groups of employees can band together in a collective action lawsuit against their employer. Collective actions often result in expensive and lengthy litigation.