Is Your Employer Stealing Wages with Time Tracking Software?

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Although time tracking software streamlines clocking in, clocking out, and keeping track of an employee’s hours, it is not without controversy. According to a report by the American Business Law Journal, there is evidence that this technology may allow employers to more easily commit wage theft. 

Wage theft is a big problem for hourly employees who have to use time tracking software programmed by their employers. Many victims of wage theft are already financially vulnerable and have limited ability to take on big corporations, who are often the primary culprits.

This article will explore how digital time tracking software can result in stolen wages and violations of wage and hour laws. 

If you think you may be a victim of stolen wages due to time tracking software or you’ve experienced any other type of wage theft, contact We Stop Wage Theft to discuss your options.

How Can Time Tracking Software Contribute to Wage Theft?

Time tracking software is a tool, like any other software. The way it is used by employers is what creates the opportunity for digital wage theft. Many employees are unaware that they’re taking home less money than they’ve earned when they don’t have access to their own time cards. As a result, wage theft can persist for years without the employee knowing that their wages have been stolen. 

Between 2017 and 2020, $3.24 billion in stolen wages was recovered through state and federal enforcement actions and private class action lawsuits. However, these recoveries represent only a small fraction of what was actually stolen from low-wage hourly workers.

Types of Digital Wage Theft that Time Tracking Software Enables

There are three main features of time tracking software that can be manipulated to the employee’s detriment. While such features are intended to make recording the time employees spend working more convenient, they have the  potential to rob workers of huge amounts of money. 

  1. Automated Rounding

Automated rounding is a feature of time tracking software that allows employers to automatically round punch-in and punch-out times to preset increments—usually every 15 minutes. 

What this means in practice is if an employee punches in at 8:47 AM for a 9:00 AM shift, the software will round their punch-in time to 9:00 AM, erasing 13 minutes they worked. If the same worker punches out at 5:11 PM, due to automated rounding their punch-out time gets altered to 5:00 PM and they lose an additional 11 minutes of pay.

In this scenario, the employee lost 24 minutes of pay for one day, which adds up throughout a pay period. The amount of time lost due to “rounding” can grow significantly over the course of an employee’s tenure.

Another important consideration is how this affects overtime pay. Automated rounding can keep employees’ recorded hours worked per week at exactly 40, even if they worked an extra 24 minutes a day. Depending on how the worker is classified, this can result in the loss of overtime pay.

  1. Automatic Break Deductions

Automatic break reduction is a feature of time tracking software that removes a pre-allotted amount of time from an employee’s number of worked hours to account for meal and rest breaks. Because this is an automated feature, employees have no say as to whether or not this deduction is applied to their total hours worked.

In fields such as health care, workers often are unable to take a full 30-minute meal break due to the demands of the job. In time-sensitive situations such as medical emergencies they may be forced to skip lunch altogether. This shortened (or non-existent) break isn’t reflected on their timecards due to the automatic break deduction feature.

What this means in practice is that hourly workers may not be paid for the time they spend working through their lunch breaks. Over time, this can result in a substantial amount of wages being wrongfully taken from an employee. 

  1. Altering Hours Worked—Time Shaving

By far, the most egregious form of digital wage theft is the practice of time shaving. Time shaving is the purposeful alteration of an employee’s time records in the employer’s favor. Employers usually engage in time shaving to avoid paying overtime to employees who worked over 40 hours in a workweek. 

Digital Wage Theft Under the FLSA

Now that we’ve explored the ways employers misuse time tracking software, we need to look at the law that these features violate—the Fair Labor Standards Act (FLSA).

What Is the FLSA?

The Fair Labor Standards Act is a sweeping piece of legislation that offers federal protections for employees. Though its origins go back to FDR’s New Deal era, it has since seen many updates and clarifications.

The FLSA provides the following blanket protections to non-exempt employees (contractors, freelancers, or other non-salaried workers) in the US.

  • The right to a minimum wage
  • The right to overtime pay when an employee exceeds 40 hours of work per workweek
  • The legal requirement for employers to keep accurate records of hours worked and pay for employees
  • Restrictions on child labor

The time tracking software exploits discussed above usually violate the legal requirement that employers keep accurate records. All three misapplications result in inaccurate records that misrepresent the employee’s amount of time working. These practices can also lead to overtime violations if hourly, non-exempt employees worked more than 40 hours per workweek. 

What to Do if You Suspect You Are the Victim of Digital Wage Theft?

Do you suspect your employer has been stealing wages from you through unscrupulous use of time tracking software? We Stop Wage Theft recommends you take the following steps.

Document All Communications with Your Employer

You’ll want to keep records of all communications with your employer—any emails, texts, even notes of conversations. All of these can be useful evidence if you need to take legal action against your employer. 

Keep Records of All Timesheets, Timecards, and Pay Stubs

Keep all official documents from your employer, including pay stubs. If you have access to your timecard or timesheet, make copies. Also, consider keeping track of your own time independent of the time tracking software your employer uses. You can compare your reported hours worked to what your employer has recorded.

Reach Out to HR About the Issue

Human error does account for some discrepancies in pay. It is possible that an honest error  resulted in a miscalculation of your hours worked. Reach out to HR with your evidence and bring the issue up with them. 

If it were a legitimate mistake, they should be able to fix it for you. However, if you receive pushback or face retaliation for bringing the issue up, it could be a sign that your employer is knowingly engaging in digital wage theft. 

Speak With an Attorney About Your Legal Rights

If all else fails, it’s probably time to pursue legal action. An employment lawyer can help you determine whether your rights under state and federal wage and hour laws have been violated. .

How We Stop Wage Theft Can Help You Earn Back Stolen Wages

We Stop Wage Theft  helps connect workers with legal professionals so they can fight back against unscrupulous employers.

You have a right to the wages you rightfully earned. Contact We Stop Wage Theft today if you believe you have been the victim of digital wage theft.

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