New Timekeeping Requirements – What Does This Mean For Your Business?
December 16, 2019
UK employees work some of the longest hours in Europe. Yet the UK’s productivity is lagging behind other G7 countries causing businesses and the economy reduced growth. Long hours also contribute to stress, depression and anxiety which, in 2018/19, accounted for 44% of all work-related ill health cases. In short, a long hours culture isn’t any good for anyone.
Now a ruling from the European Court of Justice has mandated that businesses record all the hours employees work using timekeeping systems. We take a look at what this means for your business. And how you can get the best return from your timekeeping system investment.
Why Is This Happening?
The EU has previously attempted to limit a long hours’ culture in the shape of the Working Time Directive. This law, established in 2003, stated that, unless employees choose to opt out, they should not work longer than 48 hours a week and they are entitled to an 11-hour break every 24 hours.
However, some trade unions have questioned the law’s efficacy, particularly when it comes to the accurate recording of employees’ hours.
According to a Spanish trade union, 53.7% of overtime hours worked in Spain are not recorded.
This results in an action being brought before the European Court of Justice (ECJ) seeking to force Deutsche Bank to set up a timekeeping system.
In making its judgement the court noted:
- the importance of workers’ fundamental rights to a limit on the maximum number of working hours and to daily and weekly rest periods in line with the Working Time Directive
- that Member States are required to ensure workers benefit from the rights conferred on them
- without a system to record the duration of time worked each day by each worker it’s not possible to determine, objectively and reliably, the number of hours worked and when, or the number of hours of overtime worked.
This has resulted in the ECJ mandating that businesses must introduce new timekeeping systems to ensure workers’ rights are complied with.
What Kind of System Do You Need?
The ECJ did not define the type of system you need to use leaving it to Member States to define their own arrangements. However, the system must determine the number of normal and overtime hours worked and when in a way that’s objective and reliable.
TImekeeping systems typically consist of a combination of hardware and software. The physical system can take the form of a biometric scanner, swipe card system or a clocking in machine. Supported by software that captures the data, these systems can be customised to provide the exact reporting your business needs.
There are lots of different solutions available with price points starting at several hundred pounds and running into thousands or tens of thousands of pounds. The exact cost will depend on the number of employees and sites you operate and your business requirements.
The Business Benefits
Let’s be honest – the law says you need to have a timekeeping system so you’ll have to set aside some budget. However, introducing a new timekeeping system can do much more than help you meet your legal obligations.
More information, more insight
With more reliable data, you’ll have a better understanding of your workforce’s habits which will empower you to make decisions based on facts rather than guesswork.
Timekeeping system reports can flag issues like:
recurrent absences which might indicate a disengaged colleague, a potential leaver or someone struggling with ill health
- dips in performance from one of your best people that directly correlate to long hours
- recurrent lateness and no evidence that the hours are being made up at the end of the day
With this kind of information you can assess workforce challenges and take action to correct them. Which could mean keeping hold of top performers, retaining someone with illness or ensuring every team member is fulfilling their contractual hours.
Help with holiday pay calculations
The information gathered in a timekeeping system can also help you calculate holiday pay which must now include regular overtime and commission payments. Depending on the system you already use for this process, you may be able to adapt it to meet the new timekeeping requirements. Or you could kill two birds with one stone with your new software.
Fair treatment and employee engagement
This new requirement isn’t just good for you as a business owner but for your employees too. They’ll feel that they’re being fairly compensated for the time they work leading to engaged employees and an even more harmonious workplace.
Using a timekeeping system to visualise your business’ time and attendance, you’ll have the insight to help your people and your business achieve peak performance. And you’ll be one step ahead of legislation too.
Find out more about Tercus HR’s services or get in touch for support with any people problems on 0330 555 1139 or at firstname.lastname@example.org.