Why Having an Automated Attendance System Is Crucial in Payroll Distribution?

If there’s one day that employees always look forward to at work, it’s payday.

However, calculating salaries is not an easy feat, which is why some companies prefer to outsource accounting firms or payroll processing agencies to calculate the salaries of their employees on their behalf. But even then, there are various challenges that these outsourced service providers encounter when processing payroll, including disputes in attendance.

Attendance plays a big role in how employees are paid. In Hong Kong, there is Regulation 418, which states that an employee who is continuously employed by the same employer for four weeks or more and for at least 18 hours per week is regarded as a worker under a continuous contract. Regardless if they’re full-time or part-time employees, people employed under a continuous contract are entitled to benefits such as statutory holidays, rest days, sickness allowance, and more.

Therefore, this matter puts importance on companies having an automated attendance system. Employing one will allow employees to input their clock ins and outs and apply for leaves on their own, and ultimately help accounting firms and payroll processing agencies correctly calculate the salary of their clients’ workers.

Having an automated attendance system offers many benefits such as the following:

Accurately record the amount of days or hours that employees render

There are some cases where employees receive additional pay on top of their basic salary. For example, employees who have been employed under a continuous contract for not less than three months immediately preceding a statutory holiday are entitled to the holiday pay. The payment is calculated as the average daily wage of the employee for 12 months prior to the statutory holiday.

Having an attendance system where employees can input their work hours during a holiday can help payroll processing service providers track this kind of attendance data and pay employees what they’re due.

Comply to labour laws

Companies in Hong Kong are required to pay their employees not later than seven days after the end of the wage period. If they fail to do so within the specified amount of time, they are required to pay interest on the outstanding amount of wages to the employees. If an employer who willfully and without reasonable excuse fails again to pay wages to an employee when it becomes due is liable to prosecution and, upon conviction, to a fine of $350,000 and to imprisonment for three years.

To avoid these penalties, employers and their outsourced payroll processing partners must use an attendance system to monitor employees’ work hours in one platform and use that data to compute and distribute wages on time. Technology can help streamline and improve the attendance monitoring and payroll distributions processes.

Determine which employees are entitled to benefits

Other than full-time or part-time employees, there are also contractual and self-employed workers. Employees who don’t meet the metrics of a “continuous contract” are considered contractual or self-employed employees, both of which have control over their own work procedures, time, and equipment, and carry business on their own account with investment and management responsibilities, among other things.

Simply put, contractual or self-employed employees aren’t eligible to receive the rights and benefits entitled to employees engaged under a contract of employment. With an automated attendance system, both employers and HR vendors can monitor if an employee is able to meet the metrics of a “continuous contract” or not.

Evidently, having an automated attendance system can greatly influence how payroll processors compute salaries. Workstem’s attendance management system, for example, is designed to help both HR professionals and their payroll partners resolve any disputes in attendance and, ultimately, pay. The system also helps users export reports such as the Regulation 418 Report to see whether non-continuous contract employees can be qualified under Regulation 418 already.

Additionally, Workstem’s attendance management system caters to both fixed working hours and roster-based shifts, allowing HR professionals to better monitor all kinds of employees and payroll processors to seamlessly distribute their pay.

Technology offers the kind of flexibility and convenience that HR professionals and their partners need to improve their workflows and better satisfy employees. In this day and age, agile processes are needed more than ever, especially when it comes to paying employees what they are due.

Read More:

How to Select an Attendance System?
Why Is It Difficult to Track Employee Attendance?
Many Part-time Employees? How to Take Care of the “418” Rule?

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