Automated Timekeeping Systems and Compliance to New Healthcare Law

  • Posted by Michael Beauchemin on Thu, May 02, 2013 @ 01:53 PM

    Why would an automated timekeeping system have anything to do with the Patient Protection and Affordable Care Act you ask?  Quite frankly, everything!

    It is now essential, for employers to track and accurately measure employees’ hours for the new health care compliance requirements.  Beginning this year employers need easy access to historical time records and proof of employees’ hours for the Patient Protection and Affordable Care Act.

    To understand why you first need to to understand a few basics of the new health care law.

    • For your company you have to define a measurement period from 3 to 12 months.  This is the period of time after hiring an employee where you measure and track the employees hours for the purpose of classifying them as a full or part-time employee.
    • The Patient Protection and Affordable Care Act requires you, as an employer, to determine the number of full-time employees or full-time equivalent employees. To calculate this, requires you have an accurate record of how many hours each employee works for the months you choose for your measurement period.
    • If you calculate the number of full time employees and full time equivalent employees and you have more than 50, you are required to comply with the health care law mandates for a large employer.  This means providing a minimum amount of health care coverage for your full-time employees or paying a fine.
    • You only pay health care coverage (or fines if you choose not to provide health care coverage) for workers that are classified as full time employees.

    Since health care coverage cost or fines are tied directly to the number of full time employees you have, and a full-time employee is determined during your measurement period it will be important to:

    1. Have an accurate way to track an employees hours.
    2. Pull custom reports over a 3-12 month period that corresponds with your measurement period.
    3. Have an automated employee time and attendance  system that sends out an alert as a part-time employees’ hours reach a threshold you do not want to exceed.  Many companies have opted to limit their part time employees to 26 hours per week or less.  This minimizes their healthcare coverage cost or fines by minimizing the number of full time employees they have on their payroll.

    An automated timekeeping is ideal for effective time tracking and reporting.  For any company that has more than 50 employees it will be difficult to maintain adherence and accurately track and pull reports to determine compliance to the new healthcare law with some automated timekeeping system.

    In addition to helping you comply with the Patient protection and Affordable Care Act an employee time and attendance system will help you comply with the Fair Labor Standards Act which requires employers to:

    1. Collect and maintain certain key employment data
    2. Retain key timekeeping records for a minimum period of time as specified by the FLSA
    3. Have available key timekeeping records in a central location for immediate access if requested by a regulatory agency.
    4. Demonstrate a complete and accurate system for measuring and tracking employee hours as required by the FLSA.

    If you are not currently using an automated employee tracking system it is an investment that is well worth making. In the coming years, most businesses will be unable to operate and compete efficiently without accurately tracking employees hours to manage employee cost and having a system for accurately reporting those hours to regulatory agencies.

    If you would like more information about automated timekeeping systems you may visit our timekeeping page here.

    We are also offer a free 30 day trial for a timekeeping system that cna be requested here.  No credit card number required or long term obligation required.  Just sign-up and you have full access to the web clock so you can check it out to see if it meets your needs.

    CTA Timekeeping 12 Benefits