Owners, managers, and employees alike cringe at the word “overtime” because it elicits negative emotions. Owners hate that it costs them more money. Employees hate that it costs them more time. Managers don’t hate but loathe having to work overtime almost every week of the year.For architecture and engineering firms, overtime is bound to happen at some point every year. A 50-hour project can pop up with three days to turn around, meaning crunch time and, of course, overtime. The workload constantly grows, but it all must get done on time.
Because overtime is a near-necessity in AE firms, owners and managers need to understand the importance of tracking overtime and related payroll using a reliable, automated timekeeping system.
Here are three reasons why accurate timesheets are needed to help you deal with potential headaches associated with employees working more than the standard 40 hours per week:
Meeting and exceeding client expectations is a primary goal of every firm. For an architecture or engineering firm, delivering a quality, final project often depends on the number of employees available, and the quality of work performed by these employees. Accurate time tracking as a routine in your firm helps you to estimate the future workload and staff allocation.
For example, how many hours will it take you to complete the project you just took on for a new client? Do you need one or more employees to work 40 hours a week? Do you need to hire a temporary employee now so you can complete the project by the deadline you just said yes to?
Your situation may dictate that you either ask your current employees to work overtime or increase the quantity of employees available to help complete the project. If you don't increase the quantity of hours worked by your current employees or hire additional staff even on a temporary basis, the quality of your final product could be adversely affected.
Overextended or Underutilized Employees
Imagine you just survived a major project. Now, one of your employees has 300 hours of billable work waiting to be attended to. Another one of your employees has 5 hours of billable work that will be done by lunch.
If you're not aware of this workload imbalance, you'll have one employee working overtime for the next two or three weeks.
By tracking work that is done, as well as that which still needs to be completed, you can quickly pinpoint an imbalance in workload among your employees and reallocate projects to avoid either having to pay overtime to hourly employees or having salaried employees work longer than they need to.
The Internal Revenue Service isn’t the only government agency that has an active enforcement wing to collect past due tax liabilities. A lesser-known agency, but just as prominent in the business world, is the “Wage and Hour Division” (WHD) of the U.S. Department of Labor.
In 2011, the WHD collected back wages totaling $225 million. Since service-based firms don't employ many, if at all, non-salaried employees who are entitled to time-and-a-half for hours worked beyond 40 a week, the majority of back wages collected have been for overtime.
Even if you have only one or two hourly employees, being vigilant in your compliance with labor laws and accurate timekeeping can prevent possible headaches with the WHD down the road.
Overtime doesn't have to be feared by owners and employees. If it's properly tracked, timesheet and overtime reports can help business owners potentially save money by decreasing overtime hours needed to be worked by hourly employees, while salaried employees can clock out for the weekend after contributing their 40 hours.
Accurate Timesheets with BQE CORE
BQE CORE offers smart yet simple time tracking, billing and project management solutions for architecture, engineering and professional services. Without accurate timesheets, overtime will build up and cause employees to feel overworked and your firm to spend more money than you originally intended.