Most discussions involving a time clock app focus on the advantages it affords businesses regarding the avoidance of overpaying workers. However, just as important is wage theft – whether accidental or intentional.

Wage theft is when workers go unpaid for some of their hours of labor. Certainly, it can benefit a business in the short term to help meet tight deadlines or manage costs. In the long run, though, it is always detrimental to a company.

Problems Caused by Wage Theft

  1. Employee churn. While workers can be forced in the short term to be paid for fewer hours than they actually work, expect them to have long memories. When not using a time clock app, a worker may feel mistreated and will always be looking for an opportunity to leave the company and find work elsewhere. This can be particularly bad for a company when they lose someone with a wealth of knowledge and training, making them difficult to replace. Even worse, they may have knowledge of company processes or proprietary information they can potentially take to a competitor.
  2. Failure to record overtime. Many employees are required by law to receive overtime pay. In such instances, failure to record hours accurately that would qualify for overtime may be putting a company on a collision course with the government for illegal business practices. A few hours of saved money can quickly turn into crushing fines.
  3. Brand damage. It is growing harder and more dangerous for companies to get away with less than perfect business practices. The growth of the internet, and social media, in particular, means even minor infractions or injustices by a company, whether intentional or not, can make them the unwanted center of attention on social media. Companies increasingly must devote care and time into defending their brand name to avoid even the semblance of treating workers unfairly, or they may find themselves subject to bad press and boycotts.
  4. It is simply illegal. Of course, there is the most serious problem regarding wage theft. It is actual theft and, therefore, criminal and illegal. No company wants to find themselves facing legal charges. Worse, it can be company-destroying for any business where trust is a central part of their products or services. Companies working government or security contracts can find their business dry up permanently overnight once their integrity has been called into question, whether the infraction was intentional or not.

Causes of Wage Theft

Wage theft is rarely intentional. It is usually the result of a slippery slope caused by the necessities of the moment. It is easy for management, facing deadlines, to ask an employee to stay just a “little later” in the name of company solidarity.

Unfortunately, the success of this practice can actually make it a chronic issue. If upper management sees deadlines being met and is unaware it is being accomplished on the backs of unpaid labor hours, they’ll expect the same turnaround for future projects. This obviously creates a cycle where management begins to rely on those unpaid hours.

The Solution

A great cloud-based time clock is the tested solution to wage theft issues. By automating time tracking with the help of an online timecard system, it removes the temptation for abuse altogether. A modern time and attendance app is even more effective as it can be tooled for smart timesheet management. Employees can be required to even log into and out of work by logging onto their computer, thus making it impossible to work without the hours being recorded.

Therefore, an exceptional time clock app can be an essential part of a business to treat its employees fairly, protect their brand identity, as well as make sure the company doesn’t stray into any legal issues.