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"Accurate workforce forecasting, scheduling, and deployment are as
basic to business success as anything a company does. If your company can cost-effectively solve its
complex workforce management challenges, you will improve your day-to-day labor performance and that
will improve overall business results. "
Ensuring Enterprise-wide Compliance
is also known as :
Department of Labor
United States Department of Labor
Sarbanes Oxley Compliance
Employment Labor Law
Labor Law Information,
Corporate Awareness of Labor Law,
Child Labor Laws,
Employee Rights at Work,
Violations of Labor Laws,
Fair Labor Standards ACT,
Family Medical Leave ACT,
Table of contents
Corporate awareness of labor law breaches is on the rise, yet compliance with these regulations
remains elusive. In 2004, one of the world's largest retailers discovered over 1,000 contraventions
of child labor laws during an internal audit. Since 2001, back-wages collected by the Department of
Labor (DOL) for violations of labor laws increased 33 percent. A quick-service company was fined $13
million, a financial services provider was fined $22 million, and an insurance firm was dealt a $90
million judgment. Corporate awareness is not a sufficient compliance strategy.
Complying with the Fair Labor Standards Act (FLSA), the Family Medical Leave Act (FMLA), and other
labor laws and regulations represents major challenges for employers. At the same time, non-compliance
with these government regulations is becoming increasingly costly.
In 2003, the DOL reported that back wages collected on FLSA cases alone reached approximately $212
million, a 21% increase from a 2002 record. Inadequate workforce management processes are largely to
blame for non-compliance with government workforce regulations. The list of shortcomings is long and
the issue widespread: labor forecasting and scheduling that does not account for minor work rules;
time collection methods that cannot prevent overtime violations; manual payroll calculation practices
that result in compensation errors; entitlement tracking approaches that cannot keep up with changing
labor regulations. The challenges are particularly acute in industries with large hourly workforces
such as retail, manufacturing, healthcare,
A key element of any labor compliance program is improving the accuracy, auditability, and consistency
of workforce management processes-employee forecasting and scheduling, time and attendance, and workforce
reporting. These processes have historically had little automation and few controls. For market-leading
organizations, this focus is more than a legal matter. FMLA
and FLSA violations not only impact the bottom line, but erode goodwill between employers
As the second in a series of enterprise compliance white papers, this document examines the risks facing
companies grappling with labor law compliance. Labor laws represent only one element of a comprehensive
workforce compliance initiative. It is critical for organizations to adopt measures that help to ensure
enterprise-wide compliance. In the other white papers of the series, "The Sarbanes Oxley Act" (SOA) and
"Internal Regulations", additional critical elements of successful compliance initiatives are discussed.
A leader in workforce management, Infor WFM Workbrain assists the world's largest and most complex companies
to effectively plan, deploy, and manage their workforces to achieve compliance objectives.
While SOX may often dominate the corporate compliance agenda, the prevalence of highly visible
corporate convictions for DOL infractions keeps labor law violations prominent in the media.
Labor laws represent some of the most complex regulations a corporation must follow. The FMLA
and the FLSA are examples of legislation that have proven both complicated and costly to
employers. The FMLA guarantees eligible employees unpaid leave for specific medical reasons.
In 2003, there were 3,565 complaints of the FMLA violations, and millions of dollars awarded
to complainants. Widespread confusion about how to apply FMLA regulations is aggravated
by leave management processes that are decentralized and manual. The FLSA establishes
minimum wage, overtime pay, recordkeeping, and child labor standards for full-time and part-time
workers in the private sector and in federal, state, and local governments. Though FLSA remained
largely unchanged for 50 years, organizations still struggle to maintain compliance with its
extensive provisions. In 2003, back-wages collected by the DOL for Fair Labor Standards Act
infractions alone reached an 11-year high.
Back-wages, front pay, and legal costs are only a portion of the burden that saddles employers who
don't comply with these DOL regulations. In fiscal year 2003, the DOL assessed employers nearly
$10 million in civil penalties.
Until August of 2004, the FLSA had remained virtually unchanged for over a half century. Still, many
employers do not grasp all of the FLSA's complicated requirements. A study by the DOL estimates
that over one-half of all employers have misclassified employees, exposing employers to back-
wage liability. Navigating the complexity of labor laws is challenging enough without the internal
risks of inconsistently or incorrectly applying rules to employees. Daily, intentions to comply with
DOL regulations are compromised by the manual interventions interspersed throughout
Of the host of federal labor laws administered by the DOL, two regulations that offer particular
compliance challenges for employers are minor laws and overtime rules. Minor law violations often
begin with improper workforce deployment. Employee scheduling errors result in the inadvertent
scheduling of minors into shifts that violate labor laws. Maximum weekly hour thresholds, school-
night hours constraints, and a host of other minor-aged employee work rules are easily broken in
manual scheduling environments. Even if a schedule is generated accurately and correctly, day of
operations adjustments can produce further errors.
Without visibility into the impact on minor law thresholds, managers who manipulate employee
schedules to deal with unplanned absences or unexpected demand can unwittingly schedule
employees into illegal shifts. The scheduling of minors during unauthorized periods, or in excess
of authorized hours, is a complex activity that requires constant monitoring. With fines of
$11,000 per minor rule infraction, even involuntary contraventions come with stiff financial
These financial vulnerabilities extend beyond the fines associated with minor laws. Accurately
tracking and paying overtime is one of the largest concerns for employers trying to comply
with the FLSA. In recent history, a large insurance company paid $130 million settlement in
overtime back wages to a group of adjusters. Meanwhile, a national telecommunication company's
employees were compensated $62 million in unpaid overtime. Overtime calculation errors are
frequently the result of inadequate time and attendance processes. Improper employee
classification, manual tracking of overtime by supervisors, and deficient time-collection methods
are often the culprits. Ensuring accurate, consistent application of overtime rules across the
workforce can be grueling, and missteps can be costly.
The challenges of FLSA compliance don't end with overtime and minor rules concerns. Keeping
entitlements synchronized with changing labor laws presents additional complexities in these
environments. Tracking entitlements accurately and consistently across the entire workforce is a
critically important exercise for employers. Courts have shown that intent and good faith do not
spare companies from the judgments and settlements resulting from such labor law violations.
Rather than letting frustrated employees and the DOL identify problematic situations, market leaders
rely on end-to-end workforce management solutions to prevent issues from ever arising. Limiting
manual intervention and ensuring access to key data are essential to labor law compliance. However,
companies must look beyond time and attendance automation. Compliance with DOL regulations
requires a workforce management solution that provides not only 100 percent pay rule automation,
but also predictive and compliance capabilities in labor forecasting and scheduling processes,
workforce reporting, and time-capture methodologies.
Compliance with minor work rules, for example, requires advanced labor forecasting and employee
scheduling capabilities. This is particularly true for large, highly distributed workforces in the
services industry. Creating and publishing employee schedules while manually reconciling labor
laws with other internal policies and regulations open companies to significant risk. Schedule
optimization ensures that minors are scheduled according to minor work rule constraints such
as limitations in work hours. The system is configured to account for labor legislation in the
scheduling process, and real-time workflows alert stakeholders of impending violations to labor laws.
Employers must maintain their vigilance up to the day of operations, where events can occur
that renew the risk of violations. A store manager might manipulate a schedule to deal with an
unplanned absence and inadvertently schedule a minor into an illegal shift. An employee showing
up early for work could result in increased work time and violate a minor law. Real-time schedule
validation at the point of punch, and real-time manager alerts and notifications, can prevent
occurrences such as these from happening.
Once schedules are published and filled, time and attendance solutions ensure accurate time
tracking and prevent pay-rule application errors. The automation of all pay rules ensures that an
organization's rules are applied consistently without exception. Even when companies automate a
portion of their pay rules, the most complex rules commonly remain manual, leaving most at risk
of error. A 100 percent pay-rule automation is vital to continued labor law compliance.
The key to a sustainable, 100 percent automated pay-rule approach is to avoid expensive
customization. Advanced technology can automate even the most convoluted pay rules through
configuration. Total cost of ownership remains low, providing executives the comfort that long-term
compliance - even in an environment of changing labor regulations is sustainable. Advanced
workforce management technologies enable pay rules to be easily modified by a business user to
reflect evolving legislation.
Complying with labor laws isn't limited to accurately collecting and processing data. Companies
must be able to extract data easily and accurately and monitor compliance continuously. Leading
solutions include query tools designed for business users so that the key compliance stakeholders
can monitor adherence to regulations without unnecessary reliance on IT. In addition, solutions
must provide flexible auditing functionality. For example, time and attendance records should be
delivered with the ability to time-and date-stamp every transaction, and log any changes made to
data, in real time.
While workforce management solutions may differ, the following key features can help to ensure
predictable workforce processes and alignment with DOL regulations.
|100% Pay rule automation
||Pay rules that aren't automated are typically the most complex, manual,
and error-prone. Without automation of
all pay rules, the chances of producing an inaccurate
payroll remain. In addition, changes to regulations and laws
can mean needless difficulties to update manual
processes, promising more inconsistencies.
|Industry-specific scheduling solutions
||Look for employee scheduling solutions tailored to meet the
needs of your particular industry. Deployment of labor
is a critical first step in the path toward compliance, and
ill-suited scheduling solutions can result in improper
workforce deployment. Large retailers, for example, require
sophisticated labor forecasting and schedule optimization
to ensure DOL regulations are adhered to as hard
constraints in the scheduling process. Manufacturers, by
contrast, require a solution that ensures that right-skilled employees are scheduled to work on certain shifts and
machinery, to avoid safety violations.
|Time and attendance
||A robust system automates time tracking, pay-rule
calculation, and application. Delivered libraries of pay rules ensure fast and exact fit to unique
validation at the clock reader prevents employees from clocking into non-compliant shifts.
||Workflow pushes real-time alerts to stakeholders to keep
them ahead of potential DOL violations. A push-based
technology architecture is required to trigger these
proactive manager and executive notifications.
|Central integrated database
||An end-to-end, integrated solution that centralizes
workforce management for decision support,
analytical insight, and compliance with reporting
demands of SOX and the DOL.
|Flexible reporting / auditing
||Time/date stamps for every transaction and a log
for every change in the system. On-demand queries
should allow business users to report on data without
unnecessary reliance on IT.
||Ensure that the right people have the right access
to the right data—configurable, rules-based, and
integrated with Workflow to enable a fully automated
and optimized process.
||An advanced architecture ensures the sustainability of
compliance initiatives. Technology that allows for
configuration of the most complex pay rules inside
upgradeable libraries, lowering total cost of ownership (TCO) and long-term maintenance of compliance.
More than ever, employees are prepared to voice their dissatisfaction with labor-law violations. The
courts can impose back-wage settlements that are materially damaging to a company's income
statement while the media publicity can be harmful to a company's reputation. At the same time, labor
law violations increase workforce dissatisfaction and frustration, affecting productivity and turnover.
Complying with DOL regulations requires an end-to-end workforce optimization solution capable of
optimizing the entire workforce supply chain-from labor planning to deployment to time
management to measurement. C Manual steps and touch points expose organizations to workforce
management inconsistencies, and the resulting errors leave employers in peril of breaching
The same tools that ensure compliance with labor laws also create a competitive advantage for
customers by dramatically lowering operating expenses and improving workforce performance.
For their efforts towards achieving enterprise-wide compliance, companies are rewarded with
an optimized workforce. The impacts on profitability can be stunning. Infor WFM Workbrain solutions
are proven to lower inflated payrolls, boost productivity by matching labor supply to demand, and
increase labor data accuracy.
All companies must respect the DOL regulations. However, market leaders recognize that embracing
labor law compliance with automated workforce management solutions provides an opportunity to
bolster their competitiveness.
Infor WFM Workbrain solutions help enterprising businesses to automate and standardize their time and
labor processes. Consisting of workforce planning, scheduling, forecasting, time and attendance, talent
management, and analytics, this solution enables you to reduce costs, increase sales, and boost employee satisfaction.
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