Timesheets are a necessary annoyance in many organizations. Most are filled out in a hurry, perhaps as an afterthought. Small wonder that timesheets are so often incorrect. But you really need to get those timesheets at the right time, with the right information. So you must simply correct them and move on, right?
Wrong. While there are ways to handle timesheet corrections, before you change any timesheet, beware the regulatory ramifications. Two regulatory schemes in particular have painful consequences for the unwary timesheet corrector.
Under the Fair Labor Standards Act (FLSA), employers must record non-exempt hours worked, daily and weekly. Even if employees fill out the timesheets, the employer is responsible for their correctness, with the right to make changes accordingly. But employers may also be sued for wage or hour theft — a claim that not all hours worked were paid. These suits are quite common, with real “bite” in damages awarded, such as back pay, attorney fees, civil and criminal penalties (under federal and state laws). The way you correct timesheets can either increase or reduce your risk from such suits. Make corrections as if a Department of Labor audit might one day be conducted on your timesheets.
If you do any government work, you have bigger worries than just the FLSA. The Defense Contract Audit Agency (DCAA) cares deeply about timesheet changes made by government contractors and their subcontractors or consultants. Your timesheets will be audited —unannounced floor checks!— with deep scrutiny of the corrections. Both exempt and non-exempt employee timesheets must be corrected in a certain manner, with a proper audit trail maintained at every step. Get it wrong and you could not only incur stiff penalties, but also lose your contract or even face imprisonment.
Tricky business, this timesheet correction. While “prisoner orange” may look good on some, none would prefer to wear it. Here’s what you should know before you change that timesheet.
- Minimize changes.To keep the FLSA lawsuit wolves at bay, take care to minimize timesheet changes, and hold employees accountable to time-keeping policies. Prohibit changes unless pre-approved, and have both employees and managers acknowledge when changes are made to a timesheet, and why. Keeping both the original and modified time record is a good idea.
- Stay in control. For DCAA compliance, be even more controlling. Require timesheets be completed each day, with time logged correctly to charge codes. It’s very helpful if your timesheet system can report to you (and the employee) when timesheets are late. Don’t permit future logging of time. Supervisors must approve all timesheets, and log all changes (with a reason for each change). Make sure any auditor can see the history of all changes made to the timesheet.
- Clean up (and enforce) your policies. Remember also that timesheets are only as good as their underlying policies. Tighten up any poorly-crafted and seldom-enforced rules and procedures to avoid an all-orange wardrobe next season.