Overtime pay is easily one of the most runaway expenses facing construction firms and for 2020, it’s only looking to increase. As of Jan. 1, the U.S. Department of Labor’s new mandatory overtime pay rules are in effect. The new rule raises the salary threshold from $455 a week ($23,660 per year) to $684 a week ($35,568 per year). While this affects salaried workers only, it still sets up construction companies with anyone on salary to shell out more money for overtime hours worked.

If you’re not tracking your overtime for wage workers or salaried employees through reports, you could be leaving the door cracked violations, lawsuits and disgruntled employees.

Overtime reporting communicates to HR and payroll the amount of overtime accumulated by full-time, non-exempt employees. Employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay for all hours worked past the 40-hour workweek.

So how do you know if you need overtime reporting? Ask yourself these questions:

Is your payroll process time-consuming?

Clunky, time-consuming processes that rely on outdated software and inputting numbers by hand likely aren’t a favorite task for managers. Instead of setting goals, training employees or communicating with staff, your managers are bogged down with paperwork used to track overtime. A digital process that automatically tracks time allows your managers to simply run a report showing every employee and every hour worked. Because it is automatically updated, you’ll never have to wait until the end of the day, week or month to see just how much your crews are working.

Is your process riddled with errors?

When payroll processes are done manually, they not only take a huge amount of time but unfortunately, many times are full of errors; zeros get left out, rows get deleted and so on. With overtime paying 1.5 times the hourly wage, a couple of missing or added hours per employee can quickly add up. Overtime reporting immediately alerts you to huge discrepancies, so you have time to correct inaccuracies before checks get cut, saving your already tight budget.

Do you live in (fill in blank) state?

Most states have their own requirements for overtime, others adhere to the FLSA standards. (Check out your state’s laws here.) Staying up-to-date on your state’s minimum wage and overtime laws, along with making sure employee hours are recorded correctly, helps you maintain compliance. Time tracking software ensures your employees are paid for every hour they work during their regular time and any minute overtime.

Is an employee claiming unpaid wages?

Browse through the DOJ’s press releases and you won’t have to scroll far to read about the numerous companies facing lawsuits over unpaid wages and overtime. Fraud and compliance are a construction company’s worst nightmare. An automated system not only eliminates human error in tracking overtime but if an employee ever does claim they haven’t been paid for extra work, you can easily check their daily, weekly and monthly hours with archived records and/or overtime reporting. The best defense against fraud is excellent recordkeeping.

Until you can be in all places, at all times, checking each and every hour your employees work on the job site, automated time tracking technology like ExakTime that includes powerful reporting, is the answer to correctly monitoring and paying for overtime.