Wages in this country have risen at their fastest pace in nearly two-and-a-half years and yet some businesses still pay workers less than the minimum wage. In March, companies such as Wagamama and Shoe Zone were part of a name and shame list published by the Department for Business, Energy and Industrial Strategy, which revealed 9,200 underpaid employees within a total of 179 firms.
Why are employers, intentionally or unintentionally, continuously breaching employment law when it comes to paying workers the minimum wage they’re entitled to? With the annual minimum wage rise on the horizon, now is a good time for small business leaders to pay attention, as employers do not often set out to break the law and underpay workers. It usually happens as a result of not having the right systems in place to make sure that they are managing staff rotas and wages effectively. Pay and time records are interconnected, so businesses must ensure that all teams, across all departments, keep accurate records.
There are a myriad of ways for small businesses to protect employees, but technology and company culture are good places to start.
Replace pens, papers and calculators with the cloud
To manage staff, more than 80 per cent of small and medium-sized enterprises rely on manual and time consuming solutions like pen and paper, or at the very least, spreadsheets. This is especially prevalent in sectors such as hospitality and fitness, where the pace of work is fast and dynamic and the workforce is mostly comprised of flexible workers and shift workers. Fortunately, there are many cost-effective tools in the cloud available to reduce the burden of scheduling, which a lot of these small businesses are currently missing out on.
Rather than trying to figure out what size staff is needed and how best to fill the gaps manually, staff management can be done via apps, online and in real-time, thanks to the power of cloud technology. Cloud-based employee management solutions automatically take aspects such as budget and workforce regulations into account, making it easier to keep track of employees and avoid overworked or underpaid workers.
Another advantage of cloud technology over spreadsheets is that companies don’t have to invest in developing the technology themselves. As it’s centrally developed, controlled and updated, all they have to do is simply log in and learn how to use it. Cloud technology also enables all changes to be instantly updated on the central system meaning no money is lost if shifts extend or are changed, giving peace of mind to the employee and cutting down significantly on admin time for employers.
Use GPS and automation to your advantage
Once you have decided to do away with spreadsheets and use cloud technology, explore the features that allow you to manage workers both efficiently and ethically. For example, you could enable workers to clock in using a phone app that is geofenced, which can be particularly important for mobile jobs and remote working. Being able to punch in from a specific GPS location or while being logged in to a particular Wifi network allows for much more accurate time capture and verification both for the employer and the employee. Another idea is to use a software that has built-in automation, which will not let the employer book a shift or the employee clock in if they are over their personal time allocation. This can be set by the employer and once done, both know that they cannot go over this time allocation, which inadvertently protects them from overworking.
Foster a happy company culture
During the past two decades, being paid to work overtime has become a rarity, with the number of hours racked up by British employees more than halving. That, however, has not deterred companies in the UK from setting excessively high targets that can lead to employee exhaustion and poor morale. Small businesses must take note of the fact that they could get into deep financial problems as a result of not treating employees well. Exhausted employees are not productive in the long-term and are less likely to stick around – an issue that affects many start-ups and growing businesses alike.
Tracking with punch-clock systems and managing your employees’ rotas not only helps to ensure they are not staying late without being paid, it also avoids burnout and fosters happier employees, who are more empowered to grow with your company. Enabling workers to plan as far as possible to work alongside friends, while giving them perks and work incentives, increases happiness at work. Studies repeatedly show that happy employees are more productive, so in the end, investing in employee happiness benefits everyone.
New York recently introduced a bill dubbed the ‘Right to Disconnect’, which if passed will protect employees in the city from being penalised by their jobs for not responding to emails and other digital messages outside of work hours. Similar legislation has already passed in France and Germany, which shows that we on the right track when it comes to avoiding overworking, as well as underpaying workers. However, legal changes are slow to come into effect and it is up to the employer to ensure that the employee workload and hours worked are not too heavy to affect the employee’s happiness and health.
Christian Brøndum is the CEO of shift-management platform Planday.