EU time tracking ruling: what it means for employees and employers

EU FlagThe Court of Justice of the European Union (ECJ) ruled last month that the member countries must establish detailed methods of tracking the hourly work of employees, so that they can be properly compensated for time worked.

The ruling stems from a lawsuit by the Federación de Servicios de Comisiones Obreras (CCOO), a Spanish trade union, against the Spanish subsidiary of Deutsche Bank. The main issues in question related to calculating overtime hours – 54% of which goes unrecorded in Spain – and protecting obligatory rest.  “Member States must require employers to set up an objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured,” the court said in its ruling.

The ECJ ruling is explicitly intended to protect the worker against potential workplace abuses. It is an effort to enforce the European Working Time Directive, which restricts employers from making employees work more than 48 hours a week, and grants people at least 11 consecutive hours of rest every day.

What the ECJ ruling means

The ECJ ruling extends to all companies operating in the EU. The ruling does not specify any guidelines for how employers should record work hours for their employees. In most cases, companies will need a clock-in/clock-out system that would allow them to monitor when employees start and end work, and when people have breaks. Employers will need to know employees’ exact work hours.

At first sight, this may seem cumbersome and backward. But given the technology available today, this could actually be a good idea, for both employers and employees. The “punch clock” has evolved, and businesses and employees don’t have to sacrifice contemporary technical flexibility for exact timekeeping. Modern time and attendance tracking software, often on the cloud, work on mobile phones. Clocking in and out is a matter of a tap on your smartphone screen or on a web page. So even if you are checking emails at home or taking a call from your boss, tracking that time isn’t really an inconvenience. Many of the software systems are priced such that small businesses can afford them. And most provide great analytical tools.

For employees

From an employee standpoint, there’s definitely a lot to be excited about.

Mobile and web time tracking
Mobile and web time tracking

Accurate time tracking provides irrefutable, objective proof against unlawful overtime. Time tracking thus becomes a tool towards building fairer, more accountable workplaces that help protect employee safety and health.

Moving beyond just clocking in and out, good time tracking can detail the time that employees spend on different tasks, when they take breaks and how long they last. It can help document off-site and off-hours work, as well as work-related travel, all of which are frequently overlooked. Basically, it gives employees full visibility into their work schedules – allowing them to address unhealthy workloads and the associated stress, anxiety and exhaustion that come with it.

For employers

Analyze employee time
Time Tracking reports

Companies can use time tracking to track employee working hours. It makes payroll much more accurate. Billing customers for work done is now much clearer and transparent and all hours worked can now be billed. The time tracking data collected is a great source of information on project budgets, project status, progress of works, employee productivity and many other aspects that are crucial for business success. For managers, it may make sense to combine data on the quantity and task breakdown of hours worked by employees with productivity information. It may turn out, for example, that a company would be better off with more workers keeping shorter hours than with an overworked team that’s less effective because of stress and exhaustion.

Conclusion

Time tracking doesn’t have to be tedious and cumbersome. With the right approach, you can make it an integral part of your business. Most makers of time tracking software tell customers that it’s vital to make it’s use mandatory to get people into the habit of tracking time, and that the data must be checked regularly to weed out abuses and negligence. If EU companies take the ECJ’s ruling seriously and apply it properly, it could do a world of good to their employees and their economies.

 

Did time tracking begin with Fred Flintstone?

If you are one of the millions of people across the world who need to track their time on timesheets, you know how tedious and monotonous it can be. Tracking every minute of your work day is not fun. So I’m sure this video of Fred Flintstone joyfully punching out with the red dinosaur will put a smile on your face.

Never fails to cheer me up 🙂

But timesheets are an essential part of business. Virtually every industry measures the cost of labor, in hours and minutes. And it’s timesheets that make this possible.

Code of Hammurabi
Code of Hammurabi at the Louvre

The Ancient Roots of Time Tracking

Tracing back the history of time tracking takes us to ancient Babylon and the Code of Hammurabi. Yep, him of the “eye for an eye” fame! This ancient treatise written in 1754 BC, set a typical worker’s daily wage at 6 grains of silver. Without adjusting for 3,772 years of inflation, that works out to about $ 0.25 per day.  It also mandated specific pay for specific types of work. While wages were set by the day at that time, it laid the foundation for the time-based labor practices that we follow to this day.

The Timesheet

Ben Franklin - an early time keeper
Ben Franklin – an early time keeper

So let’s fast forward to a more modern time – the 18th century. We begin to see more emphasis on effective time management as the workforce began to shift from being mostly independent work to an employer-employee business model. One of the key champions of time tracking was Benjamin Franklin. He kept the most meticulous and detailed time tracking records that could ever be. In fact, looking at what he could accomplish in one day, would make most of us feel worthless. He’s even credited with coining the term “time is money” to drive home his point.

Following Ben Franklin’s views about time and money, employers wanted to make sure that they only paid for time worked. While employees wanted to make sure that they were actually being paid for that time. Obviously there was a need for accurate and efficient time tracking methods. Pen-and-paper based time tracking records were the solution at the time. Though the system was error-prone, time consuming and relied heavily on employees maintaining truthful and accurate records, the practice continued for years and is still used in some businesses.

The Time Clock

The Bundy Clock
The Bundy Clock

Move on to the 19th century, and finally the world caught up with Fred Flintstone’s punch clock method of recording time.

As timekeeping technology developed, the daily wage was replaced by the hourly wage. In November 1888,  an Auburn, NY jeweler named Willard Bundy started producing a time tracking product by the name of The Workman’s Time Recorder. His brother Harlow started mass producing the clock and in 1890, they filed for a patent for the clock.

Several other inventors during that time period developed mechanical time recording devices to help businesses keep track of their employees’ hours. Over the next century, entire companies dedicated to time tracking solutions emerged, improving on the Bundy design. To this day, many manufacturing plants and business office employees use a time card and a black box system similar to Bundy’s Clock to record their attendance and payroll. But not all professions paid so much attention to the clock. Engineers, lawyers and architects still charged by the job and not by the hour.

The Billable Hour

A paper timesheet
A paper timesheet

During the 1950s, the efficiency experts who had squeezed extra production out of factories brought their skills to bear on the service professions. They created a new measure: the billable hour. Thus laying the foundation for your <insert profession here> charging you hundreds of dollars while you discuss last night’s game with him 🙂 Billable and non-billable hours became a significant part of project estimating and forecasts. Workers tracked their time on paper timesheets, creating a huge repository of information about how long different tasks would take.

Time Tracking in the Digital Age

As computers became more ubiquitous in the workplace, many companies started replacing the cumbersome paper time sheets with digital ones. Programs like Excel and eventually time tracking software revolutionized the way that businesses tracked their employees’s hours and time-off.

Rather than punching in and out, employees now swipe a card, enter an identification number or perhaps just click a button. All the data is then stored digitally for easy access at any point. Better yet, it’s now remarkably easy to discern patterns in and trends in the time sheet data through automatically generated reports and dashboards.

Mobile Time Tracking

Mobile Time Tracker Clock out
Mobile Time Tracker Clock out

Increasingly, supervisors and employees in the field are using mobile devices such as phones and tablets to capture the time spent on different projects and tasks. Automating these tasks, frees up employees to focus more on their work and less on writing down their time.  In addition to time, employees can also track notes, photos, expenses and other details all on their mobile devices. With mobile devices, employers can also choose to track GPS locations as well. And with all time now efficiently and easily tracked, businesses are pleasantly surprised by the addition to their bottom line when they move from paper time sheets to mobile time tracking.

Moving to mobile time tracking: Are you prepared?

So you are transitioning from paper time sheets to a slick new mobile time tracking system with all the bells and whistles. You’re excited about the new technology and you know the ROI of automated time tracking. But after years of using a manual time tracking system, you’re definitely apprehensive about the move to a mobile time tracking system. And if you are anxious, then consider what your employees would be feeling.

The transition from paper to mobile, can often seem confusing and overwhelming at first. But regardless of your company size or goals, automating your time and attendance process, will simplify procedures, eliminate errors and provide savings, overall.

But like with anything new, the transition to an automated time and attendance system needs planning and preparation. So here are some tips to help you implement the new technology and get it running smoothly.

  • Get your team on board
Select project
Select project

First things first: it’s critical to make sure that you have the right people on board to support a big change like this. New processes only work, when there is buy-in at all levels. Make sure that you sit down with team leads and influencers and explain why mobile time tracking will benefit them and the business as a whole. Get a couple of the enthusiasts to be the champions for the software. That way, the rest of your team will have someone to turn to if they need help. You might even want to offer some short-term incentives to get people to adopt the new technology quickly.

  • Explain the goal of the time tracking

First, start by asking yourself why you want to set up the time sheets. Perhaps, you spend too much time on payroll and there are too many errors in the process. Maybe your clients need more accurate time records with your billing. Perhaps you need to balance your employee workloads better.

Whatever your reasons, communicate it to your employees. Do you want to make sure that everyone is carrying their own weight? Do you want to estimate project times better for their next projects? Explain it to your employees in terms of the personal benefits that they will gain from it. Smoother distribution of efforts, better time frames on projects, faster payroll with fewer errors.

  • Choose the right level of detail

If you start tracking time without the right level of precision, you may not benefit from the new system. But start tracking too many details, and you’ll end up overwhelming your employees. So the right level of detail for time tracking must be neither too vague nor too precise. So what does that mean, exactly? We recommend that you go in stages. Start your time tracking process at a “project” level, so that you can figure out the hours spent on a project, without over-burdening your employees.

Get your team used to the  software before heading into more detailed tracking. Later on, you may want to include what tasks/deliverables people worked on, so you can get a more detailed breakdown of your projects. But remember that the more you need to track, the harder it is for your employees. So maintain a trade-off between the detail that you want and the tedium for your employees.

  • Select the activities you’re going to track
Time worked by Employee
Time worked by Employee

Once you’ve selected the level of detail, decide on the projects and activities for which you want to track time. Then start adding in more operational activities like maintenance and support that may not necessarily be tied in to specific projects. Then think of adding in administrative tasks such as holidays, time-off and training.  If you don’t need that level of detail, simply create an activity or project called “Other” to which people can add time.

  • Set up a test run / pilot

Now, you need to make sure that you and your team get a better understanding of how to incorporate mobile time tracking into their day-to-day routine.

  • Make sure that your reference data such as Projects, Users, Tasks are all set up correctly.
  • Deploy the software in manageable chunks.If you have a very large number of employees, you may want to start with one team and then deploy it to others
  • Schedule a training session for your employees. Make sure that someone is available to answer any questions that they may have.

Depending on your employee mix (age, tech familiarity), the time to get comfortable with the new technology will vary. Give them time to ease into the new technology.

  • Run in parallel

After you and your team have tried out the new software and worked out the kinks, formalize the new time tracking process. Put in place whatever rules you want for the process.

Based on how the initial roll-out goes, you may want to run the new mobile time tracking in parallel with the old paper-based time sheets for a few weeks. That way you’ll have a backup as you and the team get up to speed with the new system.

But make sure that you give everyone a firm end date for the old system and ensure that you stick with the date.

The first step, of course, is to find a mobile time tracking system that works for you!